FEDERAL COURT OF AUSTRALIA

Halal Certification Authority Pty Ltd v Flujo Sanguineo Holdings Pty Ltd [2021] FCA 1399

ORDERS

THE COURT ORDERS THAT:

1.    The second further amended originating application dated 3 July 2020 be dismissed.

2.    The amended cross-claim dated 6 August 2020 be partially allowed.

3.    The register of trade marks be rectified by cancelling the registration of Trade Mark Number 1005647.

4.    Order 3 be stayed for a period of 28 days, or if an appeal proceeding is filed from order 3 within that time, until the hearing and determination of that appeal proceeding.

5.    The applicant pay the costs of the respondents of:

(a)    the originating application; and

(b)    the cross-claim.

6.    The parties each be granted leave to make an application for a different costs order in such form as is agreed or directed within 14 days of delivery of this judgment, or such further time as may be allowed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

Introduction

1    This proceeding is concerned with the use of logos on food products to signify that they have been certified to be “halal”. The effect of this is to indicate that food has been prepared, processed and managed in conformity with Islamic rites and requirements. The applicant, Halal Certification Authority Pty Ltd (HCA), is a private company that provides halal certification to businesses and individuals who are engaged in the provision of halal goods, as well as related services.

2    HCA is owned by Mr Mohamed El-Mouelhy. Mr El-Mouelhy was a director of HCA from 23 February 1995 to 1 July 2017. His daughter, Ms Nadia El-Mouelhy, was also a director of the company from 23 February 1995 until 7 February 2003. Both were involved in the running of the business at various times. From 1 July 2017, Ms El-Mouelhy became sole director and company secretary.

3    In February 1995, HCA was registered as a company using the name Halal Certification Services Pty Ltd. In June 2004 HCA was one of approximately a dozen companies that were involved in halal certification in Australia. By the time of the trial in October 2020, that number had risen to some 25.

4    Since 8 June 2004, HCA has had the following logo registered as a device trade mark for services (but not as a certification trade mark in respect of those services):

(Trade Mark)

5    By the time that the trial took place, HCA maintained proceedings against four respondents in relation to printing on packaging for food products. These companies are part of a group known as Flujo Group:

(1)    Flujo Sanguineo Holdings Pty Ltd, the parent company, and the following three subsidiaries;

(2)    Stevia Sweetener Co Pty Ltd (formerly Natvia Pty Ltd);

(3)    Raw Earth Sweetener Co Pty Ltd; and

(4)    Natvia IP Pty Ltd.

While these four companies do not comprise all of the members of Flujo Group, it is convenient to refer to them by that collective name in these reasons.

6    In about 2009, Flujo Group was in its infancy, according to the unchallenged evidence of Mr Mark Hanna who was, at that time, the managing director of all the companies in Flujo Group. Flujo Group was developing skills in relation to product development and the delivery of products. The natural sweeteners on the market at that time had a bitter aftertaste. The artificial sweetener product sold under the brand “Equal” had market dominance as a sugar alternative. Flujo Group considered that there was a market for a stevia-based natural sweetener, provided the bitter aftertaste could be minimised, and that it looked like sugar.

7    The development and delivery of packaging for products was handled in-house by companies within Flujo Group. Two of these companies were Natvia and Raw Earth. Raw Earth, the third respondent and second-cross claimant, was responsible for similar packaging-related aspects of sale of other natural sweeteners developed by Flujo Group.

8    The products referred to in the pleadings as the Natvia Products are, in substance:

A.    Natvia 40 x 2g sachets 80g pack sweetener;

B.    Natvia 80 x 2g sachets 160g pack sweetener

C.    Natvia 300g canister sweetener; and

D.    Natvia 600g pouch sweetener.

9    The products referred to in the pleadings as the Raw Earth Products are, in substance:

A.    Raw Earth 200g canister sweetener; and

B.    Raw Earth 40 x 2g sachet 80g pack sweetener.

10    Printed on the packaging for the Natvia Products and for the Raw Earth Products was the following logo:

(Packaging Logo)

11    There is no dispute that the Trade Mark and the Packaging Logo are substantially the same. The respondents’ defence admits that the Packaging Logo is substantially identical with the Trade Mark within the meaning of s 10 of the Trade Marks Act 1995 (Cth).

12    It is also not in dispute that the identical Arabic characters at the centre of both logos can be transliterated as “halal”, which translated into English means “allowed or permitted in accordance with Islamic rites”. That is, the Arabic characters in context are apt to convey that the products are halal. There is a live question as to whether a consumer would be likely to take the two additional steps of understanding that the goods are not just being represented as being halal, but also being represented as certified to be halal, and being represented as being certified by HCA. Nowhere on the packaging logo, nor on the Trade Mark, does it expressly state that goods are certified or otherwise verified as being halal, let alone by HCA. It is left to a reader to infer both:

(a)    that someone other than the manufacturer is certifying or otherwise verifying that the products are halal, from the presence of the annulus, or from the impression conveyed by the Trade Mark or Packaging Logo as a whole, without specifically identifying who is providing that verification;

(b)    the source of that certification or other verification from the words “Halal Certification Authority Australia”, which relies upon those words actually being read, or being likely to be read, and the additional interpretive step then actually being taken or being likely to be taken.

Both steps are affected by the manner of the presentation, including in particular the size and legibility of the Trade Mark or Packaging Logo that is used, including the words “Halal Certification Authority Australia”.

13    Numerous examples of different types of packaging for the Natvia Products and Raw Earth Products are in evidence. Corresponding images are reproduced in the pleadings and submissions. The display size of the Packaging Logo on samples of the larger packaging in evidence, giving the biggest, best and clearest presentation of the logo most favourable to the case brought by HCA, is approximately as follows (and correspondingly smaller for smaller packaging in evidence):

     (Packaging Logo as able to be seen on the larger packaging in evidence)

14    For all of the packaging in evidence, a logo of the same size tending to suggest kosher certification appeared adjacent to the Packaging Logo. It consisted of a stylised map of Australia containing the letter “K” in the centre, encircled by the words “KOSHER AUSTRALIA PTY LTD WWW.KOSHER.ORG.AU”:

     (Kosher Logo as able to be seen on the larger packaging in evidence)

15    Images and hard copies of the Natvia and Raw Earth Products packaging were annexed to the affidavit of Mr O’Connor, the solicitor for HCA, sworn 9 September 2019 (Mr O’Connor’s affidavit). There is no need to reproduce images of all of the products, as it is not in dispute that they bore the Packaging Logo. However, it is useful to provide a representative sample of images of the Natvia Products. Endeavours have been made to ensure that the images reproduced below present the relevant packaging at as near as possible to the size that they appear in real life.

16    The following is the image of one of four samples of packaging reproduced in Annexure B to the second further amended statement of claim, which corresponds in size and appearance to the original Natvia packaging in evidence, being exhibit MOC-3 to Mr O’Connor’s affidavit:

Natvia 40 x 2 g sachets 80 g pack sweetener (approximately actual size)

The Kosher Logo and the Packaging Logo can be seen on the bottom left of the side panel, next to the stylised map of Australia signifying that the goods are made in Australia. A part of the packaging on the other side of the box, and therefore not in view in this image, is the text “Natvia is a registered trademark of Flujo Sanguineo Holdings Pty Ltd”. The same notice appears on the base of the box.

17    As a representative sample of the images of the Raw Earth Products, the following is the image of one of two samples of packaging reproduced in Annexure C to the second further amended statement of claim, which corresponds to the original packaging in evidence, being exhibit MOC-7 to Mr O’Connor’s affidavit:

Raw Earth Stevia and Monk Fruit All Natural Sweetener 40 x 2 g sachets 80g pack (approximately actual size)

The Packaging Logo and the Kosher Logo can be seen in the bottom left hand corner of the image above. On a part of the packaging on the other side of the box, and therefore not in view in this image, is the text “RAW EARTH IS A REGISTERED TRADEMARK OF FLUJO SANGUINEO HOLDINGS PTY LTD”.

18    There is also in evidence packaging for Raw Earth canister versions of the same product, which are smaller than the above. They bear the same Raw Earth trade mark but do not have any trade mark notice for that mark. However, the Packaging Logo is also smaller on the canisters. It is difficult to make out the words “Halal Certification Authority Australia” on the canisters without looking at the packaging closely. It would be difficult for a person to make out the words clearly without holding the canister up to their face for closer inspection. As I will discuss further below, the smaller the size of the Packaging Logo and words “Halal Certification Authority Australia”, the more likely it is that consumers will read this as signifying that a product is halal, but not additionally infer that it is also certified as halal, or by whom.

19    As mentioned above at [11], the Packaging Logo is accepted to be substantially identical with (if not necessarily also deceptively similar to) the Trade Mark as registered. HCA’s case is that by using the logo without first obtaining its permission, each of the four respondents has:

(a)    infringed its registered trade mark in breach of ss 120(1) and/or 120(2) of the Trade Marks Act; and/or

(b)    contravened ss 18 and 29(1)(a), (b), (g) and (h) of the Australian Consumer Law in schedule 2 to the Competition and Consumer Act 2010 (Cth) (ACL); and/or

(c)    engaged in the tort of passing off,

causing HCA to suffer loss and damage.

20    HCA seeks declaratory, injunctive, and pecuniary relief, with the quantum to be assessed separately in the event of success in establishing liability.

21    The respondents:

(a)    deny liability principally upon the basis that the use of the Packaging Logo did not constitute “use” of the Trade Mark for the purposes of either ss 120(1) or 120(2)(c) or 120(2)(d) of the Trade Marks Act;

(b)    rely in the alternative upon the good faith exception in s 122(1)(b)(i) by reason of use of a sign to indicate the halal quality of the goods, falling short of certification as halal;

(c)    deny passing off or any breach of the ACL;

(d)    further or alternatively, by way of a cross-claim, seek the rectification of the register by the cancellation of the Trade Mark.

22    Specifically, and independently of the legal arguments advanced in the overall denial of liability, the respondents also rely upon the following in relation to the sale of the Natvia Products and the Raw Earth Products:

(a)    Flujo Sanguineo, although the parent company of the other three respondents, was not involved in the business of the sale of those products;

(b)    Stevia (formerly Natvia) sold the Natvia Products and Raw Earth Products under the NATVIA trade mark from 2010 until July 2019;

(c)    Raw Earth sold the Raw Earth Products under the RAW EARTH trade mark from 1 August 2018 onwards; and

(d)    Natvia IP sold the Natvia Products and Raw Earth Products under the NATVIA trade mark from 1 August 2019 onwards.

The key facts as agreed or established by the evidence

23    On 8 June 2004, HCA:

(a)    changed its name from Halal Certification Services Pty Ltd to Halal Certification Authority Pty Ltd;

(b)    filed an application for registration of the Trade Mark; and

(c)    applied for registration of the words “Halal Certification Authority Australia”.

24    The application for registration of the Trade Mark was subsequently granted with effect from the filing date, by reference to classes 42 and 45 of the Trade Marks Regulations 1995 (Cth) sch 1 pt 2 – Classes of services, which refer to:

(a)    class 42: “Scientific and technical services; issuing halal certification to businesses and individuals for goods and services if religious and technical requirements are met”; and

(b)    class 45: “Personal and social services rendered by others to meet the needs of individuals”.

25    The application for registration of the words “Halal Certification Authority Australia” was refused. The trade mark examiner’s report in relation to that application included the following:

(a)    in the section titled “My reasons for not accepting your application”:

Your trade mark consists of the words HALAL CERTIFICATION AUTHORITY AUSTRALIA.

This indicates that you provide HALAL CERTIFICATION services within AUSTRALIA.

Other traders should be able to use HALAL CERTIFICATION AUTHORITY AUSTRALIA in connection with goods or services similar to yours.

(b)    in the section titled “The action you can consider” (emphasis in original):

As the trade mark is completely descriptive you will need to provide overwhelming evidence for this trade mark to be considered for acceptance. The evidence will need to show that the ordinary meaning of the word/s has been overshadowed in the marketplace by its significance as your trade mark.

26    The application for registration of the words “Halal Certification Authority Australia” was apparently not taken any further, and automatically lapsed on 12 January 2006, being 15 months from the date of the examiner’s adverse report.

27    HCA’s clients from time to time included companies that manufacture products that are distributed and sold by other companies. That is the situation in this case. In her affidavit of 13 September 2019, Ms El-Mouelhy described such companies as contract manufacturers. She referred to Techniques Incorporated Pty Ltd and Hellay Australia Pty Ltd, who manufactured the products in issue in this proceeding, as examples of contract manufacturers.

28    While Ms El-Mouelhy did not specifically refer to either Techniques or Hellay as being toll manufacturers, the affidavit evidence of Mr Hanna further referred to Techniques and Hellay as being contract manufacturers who produced Natvia products on a toll manufacturing basis. For the purposes of this matter, nothing much turns on the distinction, albeit somewhat fluid, that can be drawn between contract manufacturers and toll manufacturers. Mr Hanna’s evidence sets out that toll manufacturers do not ordinarily supply raw materials or even packaging when manufacturing products for a customer. As a matter of logic, therefore, under such arrangements toll manufacturers have less input into the appearance of the final product because, on the evidence, the packaging is provided by the customer rather than being provided by the manufacturer. That was the situation in this case. Importantly, toll or contract manufacturers are not retailers, and do not produce public-facing products of their own.

29    Techniques produced the Natvia Products on a toll manufacturing basis, with Stevia (formerly Natvia) sourcing all ingredients and packaging. Techniques blended the ingredients in accordance with the formulation and packaged the product into finished goods at their site. The finished product was delivered to Flujo Group’s warehouse ready for distribution. The first retail sales of the Natvia Products were in October 2009.

30    In a closing note in the nature of a submission on the evidence, HCA presented an outline of the history of the application of the Packaging Logo to Natvia Products and Raw Earth Products revealed by the evidence and defence pleadings, as follows:

(a)    from 2009 until July 2015 and from October 2018 until the present, Techniques has manufactured Natvia Products;

(b)    from around May 2015 until at least November 2020, Hellay manufactured Natvia Products;

(c)    from around March 2017 until at least November 2020, Hellay manufactured Raw Earth products;

(d)    since at least 2010, Stevia has caused Natvia Products in Australia bearing the Packaging Logo to be advertised, promoted, exhibited, offered for sale, distributed and sold in Australia;

(e)    since at least 1 August 2018, Raw Earth has caused Raw Earth Products in Australia bearing the Packaging Logo to be advertised, promoted, exhibited, offered for sale, distributed and sold in Australia;

(f)    since at least August 2019, Natvia IP has caused Natvia Products in Australia bearing the Packaging Logo to be advertised, promoted, exhibited, offered for sale, distributed and sold in Australia;

(g)    the name of Flujo Sanguineo has been printed on the packaging of the Natvia Products (as the trade mark holder), and at times was the only legal entity named on the packaging;

(h)    the respondents undertook the design and prepared the content of product packaging save in relation to the technical information included within the “Nutrition Information” panel;

(i)    the respondents undertook the printing and preparation of the product packaging which was then provided to the contract manufacturers.

31    While the above chronology is helpful, there are other relevant historical details as to the manufacturing process and how Flujo Group came to use the Packaging Logo. These are especially relevant to the good faith exception relied upon by the respondents in s 122(1)(b)(i) of the Trade Marks Act, but also to the question of rectification of the register by cancellation of the Trade Mark as raised by the cross-claim. The additional relevant history follows.

32    On 3 September 2003, HCA entered into the first of a number of agreements with Techniques whereby, under its former name Halal Certification Services Pty Ltd, it relevantly agreed to provide halal certification and to allow for the use of its logo to evidence that certification. On that date, being prior to the application for registration of the Trade Mark on 8 June 2004, HCA sent a letter to Techniques enclosing a copy of the completed agreement and a certificate for qualifying products. Thus the agreement for certification did not depend upon the logo having registered trade mark status.

33    The 3 September 2003 letter stated that a logo was available by email for inclusion on Techniques’ “labels, documents, etc. on application”. Although the company name was still Halal Certification Services Pty Ltd, it used a letterhead displaying the words “Halal Certification Authority Australia”. The certificate was as follows (size reduced from an about A4 size original, and bearing an unclear but still just readable version of what later became the Trade Mark):

34    On this certificate, and on all subsequent certificates, it is difficult to regard the existence of the Trade Mark (or trade mark status for that logo) as having anything much to do with those agreements regarding certification, let alone any degree of importance to the issues in this proceeding. However, after registration it is at least a presentation of the Trade Mark to the person receiving the certificate.

35    By the terms of the agreement with HCA dated 3 September 2003, Techniques relevantly agreed only to market and sell as halal goods that were in fact halal, and paid fees in accordance with the agreement. Techniques agreed to ensure that it prepared food with equipment that had been cleansed, keeping halal food separate from non-halal food, and obtaining ingredients for the preparation of halal food only from suppliers approved by HCA. The duration of the agreement was 16 months (that is, from 1 September 2003 to 31 December 2004), with Techniques paying a licence fee of $1,760, plus an inspection fee to be paid on invoice.

36    The evidence of Ms El-Mouelhy, after “reviewing the records of HCA and having spoken with [her] father” was that these agreements did not provide “any consent or other approval to use the HCA Logo on packaging for any goods of any kind” and that Techniques had never sought such consent. Further, Ms El-Mouelhy stated that it was “not uncommon” for a contract/toll manufacturer to be approved for halal certification on the basis that they were permitted to display the certification certificate on their premises, and tell their clients that they were certified halal, but not to put the logo on finished goods.

37    Further agreements were entered into between HCA and Techniques over the 17 years between 1 January 2005 and 31 December 2016 in similar terms to the 2003 agreement. HCA did not produce a copy of the actual terms of the agreement between HCA and Techniques between 2005-2016. They did produce another agreement with Techniques from 2003-2004, relating to another product, as well as their standard terms. Ms El-Mouelhy stated that each agreement HCA made was in the standard form, with a schedule completed for each client as appropriate to their circumstances.

38    In early to mid-2010, Mr Hanna and a Mr Samuel Tew, who had also been involved in establishing companies in Flujo Group, decided it would be beneficial to have halal and kosher certification for the Natvia Products. This was because it would give some customers comfort that the products were made in a controlled environment, and would provide members of the relevant cultural and religious groups with a means to make food decisions. They considered it was important that customers know who certified the product halal or kosher, and therefore to put the certification symbol with the certifying entity on the packaging. Mr Hanna spoke to Mr Matthew Martin at Techniques about wanting kosher and halal certification for Natvia Products. Mr Hanna understood that the costs of doing this would be built into the unit price charged by Techniques for manufacturing and would have little effect on prices as he also understood that the costs to Techniques of certification were marginal. As there was minimal cost involved, they considered certification was worthwhile, even though they did not see it as increasing marketability domestically.

39    In order to obtain halal certification, Techniques required evidence from Flujo Group that the ingredients had been certified, which I infer must have been passed on to HCA by Techniques. While Mr Hanna was not able to locate the certificates provided at the time of original certification, he was able to produce later certificates. No issue was taken with this having happened. A short time later, also in about mid-2010, Mr Hanna was notified by Techniques that the Natvia Products had been certified halal and kosher. Natvia obtained both the Packaging Logo and the Kosher Logo from Techniques for inclusion on its packaging. Those logos were first included on Natvia Products from about 2011.

40    On about 10 July 2010, HCA issued a further certificate, in very similar terms to the certificate reproduced above, but referring to “Natvia”:

The above certificate does not at first blush appear to have the Trade Mark affixed, but it seems likely that the faint lines in the bottom right-hand corner of the certificate, adjacent to the conclusion of Mr El-Mouelhy’s typed name, are the Trade Mark.

41    The above certificate was reissued to Techniques in the same terms, but with a clear Trade Mark affixed to each, as follows:

(a)    on about 12 January 2010, valid until 31 December 2011

(b)    on about 13 December 2011, valid until 31 December 2012;

(c)    on 3 April 2014, valid until 31 December 2013, signed by Ms El-Mouelhy as Chief Executive Officer;

(d)    on 8 November 2013, valid until 31 December 2014, signed by Ms El-Mouelhy as Chief Executive Officer;

(e)    on about 10 December 2014, valid until 31 December 2015, signed by Ms El-Mouelhy as Chief Executive Officer but with the additional words (emphasis in original) “This certificate is for the use and display by Techniques Incorporated Pty Ltd only, is valid until 31st December 2015 and remains the property of this Authority”.

42    The certificate issued to Techniques in 2015 relating to Natvia appeared as follows:

43    As can be observed, over time, the appearance of the certificates issued by HCA changed. The certificates were manually produced until an online system was introduced sometime in about March 2017. From 31 March 2017, HCA required information about products and ingredients to be submitted electronically through an online portal.

44    In about May 2015, there was a dispute between Flujo Group and Techniques which resulted in Techniques ceasing manufacturing of the Natvia Products for over three years until October 2018. As this happened on short notice, Mr Hanna contacted Mr Ashley Hawley, whom he knew at Hellay in Victoria, to produce a run of Natvia Products urgently. That took place upon agreement as to price, in about June 2015. Ms Haley Cornish of Techniques accordingly contacted HCA directly via email to remove Natvia from their list of certified halal products on 22 July 2015, and Ms El-Mouelhy responded on the same day to say the certificate had been terminated.

45    In 2016, HCA issued the following certificate to Hellay (although undated, in her affidavit Ms El-Mouelhy states that this certificate was issued on 1 April 2016):

46    By the end of 2017, the form of the certificate had changed, as shown by the following certificate issued to Hellay on 31 December 2017:

47    The above certificate has affixed both a faint copy of HCA’s company seal, and a clear rendering of the Trade Mark. The currency of this certificate using the Trade Mark straddles both the filing of the original notice of cross-claim on 14 December 2018, and the filing of the original statement of cross-claim on 4 April 2019. This is relevant to the ground for rectification by cancellation in s 88(2)(c) sought by the notice of cross-claim in general terms and by the statement of cross-claim in specific terms.

48    The first version of the last-in-time certificate in evidence overtly referring to certain Natvia and Raw Earth products was issued on 20 November 2018. This was shortly before the filing of the original notice of cross-claim on 14 December 2018, and not long before the filing of the original statement of cross-claim on 4 April 2019. It did not appear to have the Trade Mark affixed to it, only an indistinct rendering of the company seal:

49    In her evidence, when asked whether the 20 November 2018 certificate had the Trade Mark on it, Ms El-Mouelhy stated that she hated “to be the bearer of bad news” but the Trade Mark was actually contained within the above certificate, displayed on a water mark in the background of the certificate. She stated that this watermark is only visible on the original certificate, and not any copies, as part of an anti-forgery measure. This watermark is very faintly visible on the certificate displayed at [46] above.

50    According to Ms El-Mouelhy, the references in the above certificate to Natvia and Raw Earth were included in error because she was tired from jetlag, and she reissued the certificate the same day without those brand references. That replacement certificate still provided a revision date of 31 December 2019 and an expiry date of 31 December 2019. Thus those products were in fact certified halal, remembering that HCA certified products, not premises. There is no suggestion that the products or ingredients were not in fact halal, nor that the certificate referred to different ingredients to those used by Hellay. That is, the change was apparently as to branding only and the same products were still manufactured by Hellay. That certificate, being the second version of the last-in-time certificate, is as follows:

51    The final version of the last-in-time certificate was issued in July 2019. An email HCA sent to Hellay on 25 July 2019, annexing that certificate, states “Please find enclosed your updated certificate excluding the Flujo products due to a continuous breach of our agreement”. A new version of the certificate showed that the ingredients previously included on certificates issued to Hellay were removed altogether, clearly supporting the inference that those products had not been excluded before then. The dates of certification remained identical to the first and second versions of the certificate. The final certificate issued is as follows:

52    Mr Hanna stated that it only became clear to Flujo Group what HCA’s position was on the question of permission to use the Packaging Logo in mid-July 2019. This could reasonably be presumed to be either at the time of, or perhaps shortly before, the email dated 25 July 2019 was sent, attaching the above certificate, retrospectively removing the generic products which encompassed the Raw Earth and Natvia Products from the certificate. While it is apparent Hellay communicated the change to Flujo Group, there is no evidence that HCA communicated this change directly to Flujo Group. This is a point of some importance when it comes to the question of continued use of the Packaging Logo, an admitted facsimile of the Trade Mark, in good faith.

53    As set out above, it was Natvia (and then Stevia) that designed and provided the labelling to Techniques, who blended and produced the actual products. In order to facilitate this, Techniques provided Natvia with a certificate of analysis which showed the product ingredients and nutritional information. Natvia retained a graphic design company to develop the packaging. Natvia also obtained regulatory advice from an external food technology consultant, Mr Tony Zipper.

54    There is still further relevant background information to consider. Between 20 and 22 July 2009 – approximately ten years prior to the asserted breach of agreement which led to the removal of certification – there was the following exchange of emails between Mr El-Mouelhy and Ms  Cornish of Techniques (salutations and signatures omitted, errors in original):

From: Hayley Cornish [hcornish@techniques.net.au]

Sent: Monday, 20 July 2009 11:55

To: info@halalauthority.org

Subject: Halal Certification

I am enquiring as to the process involved to have formulations certified Halal.

Currently we have 5 formulations which we believe to be Halal suitable.

[What] is the time frame to have formulations certified?

[What] are the costs involved to have formulations certified?

In addition once certified are we able to use the Halal Certification Authority Australia logo on our packaging? Are there any costs involved?

Please feel free to contact me if you have any questions.

From: Halal Authority [mailto:info@halalauthority.org]

Sent: Monday, 20 July 2009 12:09 PM

To: ‘Hayley Cornish’

Subject: RE: Halal Certification

There is no cost involved in adding further products to the certificate. If you send the formulations this afternoon you will get your certificate updated before the close of business.

Attached please find our logo in a variety of files. It should be no less then 10mm in diameter and can be any colour. Approval of the label is required.

From: Hayley Cornish [mailto:hcornish@techniques.net.au]

Sent: Tuesday, 21 July 2009 02:40

To: ‘Halal Authority’

Subject: RE: Halal Certification

I have attached a document with some formulations for you to approve (if applicable).

I am still finalising two more formulations which I will send to you once completed for approval.

I don’t think we will be able to approve the pancake mix.

Please feel free to contact me if you have any questions or require any more information.

From: Halal Authority [info@halalauthority.org]

Sent: Wednesday, 22 July 2009 06:57 AM

To: ‘Hayley Cornish’

Subject: RE: Halal Certification

Please send me more information regarding:

CMC 7HF and Methocel A4M by IMCD

FCMP by Total Foodtec

I+G by Food Traders

WPC 80% by WCB

Also please supply Halal certificate for

Cheese Powder T1 and Cheddar Cheese Plus by Ballantyne

Buttermilk Powder by Murray Goulburn

Saromex Onion by IFF

[Cheese] Buds by IMCD

[unclear] Cheddar Flavour by Michelona

55    The above email exchange makes it clear that the certificate HCA gave to Techniques could have products added to it, and, in context, this applied to products manufactured for other companies.

56    The email exchange also at least implies that the Trade Mark may be added to packaging for such products, subject to the label being approved. Further, Mr El-Mouelhy providing the logo to Techniques in a variety of file formats, as well as instructions for use, effectively handing the tools for using the Packaging Logo over to Techniques (and accordingly, their clients) makes the “required” approval of the label by HCA seem in practice perfunctory at best, so long as the halal approval requirements were met. Further, the evidence indicates that there was nothing much left to be approved in any event. The halal certification was done by reference to the ingredients and a check of the manufacturing premises.

57    Moreover, there is no suggestion in the evidence of any material difference in appearance between the Packaging Logo and the Trade Mark. For a sugar substitute product, not much was involved in certifying the product as halal. There is nothing to suggest that much work on the part of HCA was involved. It seems that what was being provided was knowledge as to the requirements to be halal, and a check on the manufacturing processes. Those requirements would probably be easily met for a product which would be unlikely to involve any meat products (let alone meat that had come from an animal not slaughtered in a halal manner) and most unlikely to involve any alcohol products.

58    More importantly, there was no evidence that Techniques manufactured its own products, or that HCA had any reason to think that it did, having referred to Techniques as a contract manufacturer, if not a toll manufacturer. The unchallenged evidence of Mr El-Mouelhy was that he audited Techniques’ premises each year as part of the halal certification process, at which time he saw packaged goods. The auditors needed to know the manufacturing process in order to certify that the products made there were halal. It seems likely that such an audit would have covered the manufacturing for all the products made there, because the processes for each would either be halal, or not. Therefore, in the case of either a toll or contract manufacturer, any use of a version of the Trade Mark was necessarily used not just by the manufacturer, but by the customer for whom the products were being manufactured. Any other conclusion simply does not make any commercial sense. The alternative is that Techniques and Hellay would have been paying for certification that was of no apparent practical use to them or their customers, which must be rejected.

59    Mr El-Mouelhy initially said in cross-examination that he had been to Techniques’ premises and that they “fill packaging with ingredients”. The next question from counsel after that statement was “They don’t retail the –” at which point Mr El-Mouelhy interrupted counsel and spontaneously answered “No, they don’t retail it”. In the immediately following three questions and answers, he sought to recant, saying that he “recalled that answer” and said he had realised that he did not know whether Techniques was a retailer. I accept and prefer his original answer as being his true position. Further, at another point in his oral evidence, Mr El-Mouelhy even pointed out that he was aware that the Natvia retail packaging was not manufactured by Hellay or Techniques. This may be seen to be somewhat contradictory to his asserted lack of knowledge about whether a toll or contract manufacturer was retailing the products produced. Mr El-Mouelhy went on to say that, regardless, the packaging was not authorised to contain the Packaging Logo, even though the product contained within the packaging was produced by a toll manufacturer which was certified by HCA. While nearly all witnesses from time to time need to correct themselves or realise they have inadvertently said something which is wrong, in this case I do not accept Mr El-Mouelhy’s “recall” of his initial evidence.

60    This conclusion is reinforced by Ms El-Mouelhy’s confusing evidence on a similar line of questioning. This occurred in the context of her correcting counsel for the respondents when he asked her whether one of the products listed on the certificate, Milky Bake, went out into the public for retail sale. In her response she said that she thought he (that is, counsel) would be aware that Techniques was a powder blender. Counsel then asked whether a powder blender was different to a retailer, which she confirmed. In response to the question of whether a powder blender would have any use for the Packaging Logo, she said “not usually”, but not necessarily no, as it was open to the manufacturers to retail the products themselves. She then said that it was a “gross assumption” to expect that because a manufacturer had obtained halal certification, a retailer would want to advertise the logo on its goods, and said it was a “totally untrue statement” that the main reason why a retailer would want halal certification for a product would be to put the Packaging Logo on a product. It was never made clear why that obvious conclusion would not be true. These statements as to the possibility of a toll manufacturer retailing products on their own behalf, when their very existence seems to be predicated on an arrangement where another entity is the retailer of products they make, are divorced from reality and were not supported by any other evidence.

61    I find that on the balance of probabilities, Mr El-Mouelhy and Ms El-Mouelhy, and through them HCA, knew that Techniques was not a retailer, and that HCA correspondingly knew that Hellay and Techniques filled the packaging of customers, and that any application of any version of the Trade Mark would be for the purposes of the packaging of the customers of Techniques. The evidence carries the clear implication that they must have been aware that any approval, express or implied, conveyed by HCA to any such contract manufacturer to use any version of the Trade Mark on packaging as a practical matter was likely to be treated as approval for such use by the contract manufacturer’s customers. This is particularly so in the present circumstances, where Techniques had indicated via email to HCA that they were seeking to incorporate a logo onto packaging, which HCA knew they did not design or produce, logically removing them from the purported category of toll manufacturer customer who only sought the certification to display on their own premises.

62    While there was no express provision permitting any sublicensing by Techniques of the use of the Trade Mark, there is a surreal quality to HCA relying upon the non-existence of such a provision in circumstances where Techniques was a contract manufacturer, so was not obtaining the certification or applying the Trade Mark for its own products. Certification without that taking place was practically useless and would probably have resulted in no revenue for HCA. HCA must have been aware of this, as is clear enough from email traffic in evidence. In context, the certificates and approval to apply the Trade Mark logo was hollow and of no practical use to Techniques unless it applied to use on the packaging of contract manufactured goods. This is reflected in HCA’s conduct in relation to the Natvia products, by which halal certificates in relation to Natvia were issued to Techniques by HCA on numerous occasions over a number of years.

63    Techniques did not seek any further certification or re-certification from HCA in relation to Natvia goods after the termination of the last certificate on 22 July 2015. Nor was any request received to apply the Trade Mark from that time onwards. It follows that if the presence of the Packaging Logo on either the Natvia or Raw Earth Products did constitute use of the Trade Mark, it almost certainly would have been an infringing use for the relatively limited period in which there was no certification in place, which was the only source of any right to use the Packaging Logo as a trade mark. The goods might well have been halal, but they would not have been certified halal. The key live issue is therefore the characterisation of that use.

64    There is still further relevant evidence as to the nature of HCA’s relationship with Flujo Group, Techniques and Hellay. In about 2011, Flujo Group took steps to export some Natvia products. They wanted to use the same packaging. Mr Zipper was asked to check with the halal certifier (that is, HCA) if the same certification could be used, which would also have the benefit of making contact with the certifier whom Flujo Group knew little about.

65    Mr Hanna was subsequently copied into a 5 March 2012 email from Mr Zipper to a Mr Mark Chen at Flujo Group as follows:

I have spoken with Halal Certification Authority Australia in Sydney and they assure me that Natvia can use the current Australian Halal symbol in EU countries, UK and USA without hesitation or extra costs/authority, etc.

However if Natvia was to be sold to a majority Muslim country there may be problems and I suggest that we seek further advice if this scenario eventuates.

This is clear and contemporaneous evidence that HCA knew about its logo being used beyond Techniques since at least 2012. The only evidence from HCA to counter what was conveyed in this email was from Ms El-Mouelhy, who said that this was “inconsistent with HCA’s usual practices”. That evidence was not a denial that someone at HCA had given that assurance, and therefore had that knowledge.

66    Flujo Group eventually found a distributor for the United Arab Emirates in about 2013 and commenced selling Natvia products there with the Australian packaging. The distributor accepted responsibility for labelling requirements, and never raised an issue about the halal certification on the packaging. Mr Hanna therefore did not consider that there were problems nor did he have any cause to contact HCA. After obtaining the certifications, Techniques did not raise any issue regarding certification of the Natvia products and Mr Hanna understood that this meant that the product that they manufactured was certified halal.

67    After the dispute between Techniques and Flujo Group in 2015, Hellay continued to manufacture Natvia products as a toll manufacturer, using the same formula, manufacturing process and packaging as Techniques. It became clear later that halal certification was not obtained by Hellay. The evidence of Mr Hanna, and the case for the respondents, is that this was an oversight, which was sought to be rectified once discovered. The case for HCA was that this was not merely an oversight, but rather a reflection of the respondents’ callous attitude to the use of the Packaging Logo, which reflected no concern that this had taken place. This characterisation is relied upon to demonstrate a lack of good faith for the purposes of the defence in s 122(1)(b)(i) relied upon by the respondents. I ultimately conclude later in these reasons that the evidence establishes that the failure to get Hellay to obtain halal certification was no more than an oversight and falls short of indicating a lack of good faith or worse. In drawing that conclusion, I had regard to the detailed discussion on this topic by Beach J in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd [2016] FCA 235; 118 IPR 239, especially at [108]-[111].

68    In early 2016, Mr Hawley from Hellay told Flujo Group that he had contacted HCA regarding certification. Soon after that, in about March 2016, Mr Hawley was asked by Ms Azrina Iqbal of Flujo Group to obtain halal certification. Mr Hanna was told by Mr Hawley that an application form was completed with HCA and that the Natvia product was certified on 1 April 2016. Mr Hanna was not very familiar with the process because it was the manufacturer who looked after certifications.

69    As noted above and again below, Flujo Group resumed manufacturing arrangements with Techniques in about October 2018, while continuing also to use Hellay. There was no change in the formulation or production and Mr Hanna understood that Techniques maintained the relationship with HCA, including implicitly halal certification for their manufactured products. It is likely that Mr Hanna relied upon knowledge that Techniques was certified by HCA up until 2018, which was the case based on Ms El-Mouelhy’s evidence. It is relevant that no representative of Flujo Group was copied to the email from Techniques to HCA of 22 July 2015 terminating the certificate, apparently solely in respect of the Natvia products. There is otherwise no indication that Techniques, or HCA for that matter, notified Flujo Group that the halal certification had been terminated in respect of either Natvia or equivalent generic ingredients.

70    In about March 2017, Hellay commenced manufacturing a natural sweetener, Raw Earth Sweetener. The sweetener was made from monk fruit, stevia and erythritol, for Raw Earth as a toll manufacturer. When Flujo Group received a letter of demand from HCA on 3 August 2018, and checked with Hellay, the oversight in not obtaining halal certification was discovered. Mr Hanna asked Mr Hawley shortly after that to immediately rectify this and obtain certification for the Raw Earth product. HCA commenced this proceeding on 5 September 2018.

71    Mr Hanna kept in contact with Mr Hawley on the certification issues, and was told in September-October 2018 that certification of Raw Earth was being approved by HCA, but that the new certificate was being withheld due to the court case. I infer from this that there was no issue as to the product in fact being halal, or any factual impediment to certification as such, other than HCA’s interests arising out of this litigation.

72    With this factual history in mind, I now turn to the arguments as to the Trade Mark.

The originating application

Relevant law on infringing use as a trade mark and the good faith exception

73    It is convenient to consider the authorities and competing arguments as to infringing use and the good faith exception together. The following provisions of the Trade Marks Act are relevant to both:

(a)    Section 6 relevantly provides:

6    Definitions

(1)    In this Act, unless the contrary intention appears:

…

sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

    …

(b)    Section 7 provides:

7    Use of trade mark

…

(4)    In this Act:

use of a trade mark in relation to goods means use of the trade mark upon, or in physical or other relation to, the goods (including second-hand goods).

…

(c)    Section 17 provides:

17    What is a trade mark?

A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

(d)    Section 120(1), (2)(c) and (2)(d) provide:

120    When is a registered trade mark infringed?

(1)    A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

(2)    A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:

…

(c)    services of the same description as that of services (registered services) in respect of which the trade mark is registered; or

    (d)    goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

(e)    Section 122(1)(b)(i) provides:

122    When is a trade mark not infringed?

(1)    In spite of section 120, a person does not infringe a registered trade mark when:

…

(b)    the person uses a sign in good faith to indicate:

(i)    the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services …

74    HCA claims that the following kinds of trade mark infringement, objectively viewed, occurred:

(a)    use as a trade mark of a sign that is substantially identical or deceptively similar to the goods or services of registration per s 120(1); and/or

(b)    use as a trade mark of a sign that is substantially identical or deceptively similar to the goods or services of registration in relation to services of the same description as, or closely related to, registered services per s 120(2)(c) or (d),

and asserts that the exception in s 122(1)(b)(i) relied upon by the respondents (namely use in good faith to indicate, relevantly, the halal quality or other characteristic of the food) does not apply.

75    The principles and long-standing authority in relation to use “as a trade mark” were conveniently summarised in Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117; 87 IPR 464, per Stone, Gordon and McKerracher JJ at [19]:

(1)    Use as a trade mark is use of the mark as a “badge of origin”, a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107; 47 IPR 481; [1999] FCA 1721 at [19] (Coca-Cola); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 265 ALR 645; 86 IPR 224; [2010] HCA 15 [241 CLR 144] at [43] (Lion Nathan).

(2)    A mark may contain descriptive elements but still be a “badge of origin”: Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347–8; 101 ALR 700 at 723; 21 IPR 1 at 24 (Johnson & Johnson); Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161; Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874 at [60] (Aldi Stores).

(3)    The appropriate question to ask is whether the impugned words would appear to consumers as possessing the character of the brand: Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 422; [1963] ALR 634 at 636; 1B IPR 523 at 532 (Shell Co).

(4)    The purpose and nature of the impugned use is the relevant inquiry in answering the question whether the use complained of is use “as a trade mark”: Johnson & Johnson at FCR 347; ALR 723; IPR 24 per Gummow J; Shell Co at CLR 422; ALR 636; IPR 532.

(5)    Consideration of the totality of the packaging, including the way in which the words are displayed in relation to the goods and the existence of a label of a clear and dominant brand, are relevant in determining the purpose and nature (or “context”) of the impugned words: Johnson & Johnson at FCR 347; ALR 723; IPR 24; Anheuser-Busch Inc v Budejovicky Budvar (2002) 56 IPR 182; [2002] FCA 390 (Anheuser-Busch).

(6)    In determining the nature and purpose of the impugned words, the court must ask what a person looking at the label would see and take from it: Anheuser-Busch at [186] and the authorities there cited.

76    Certain aspects of the cases cited above in Nature’s Blend, and what was decided in that case, bear closer examination because of their particular relevance to the facts and circumstances of this case.

77    In Nature’s Blend, a registered trade mark for the words “luscious lips” was used in relation to the manufacture and marketing of lip-shaped chocolates wrapped in green. Those words were also used by the respondent, Nestlé, on the packaging for mixed confectionery. The proceeding brought against Nestlé for trade mark infringement failed at trial and on appeal. The primary judge’s reasons, as summarised by the Full Court at [23]-[28], were to the effect that:

(a)    the words used by Nestlé were agreed to be substantially identical with or deceptively similar to the registered trade mark;

(b)    that use was descriptive or laudatory of the lip-shaped confectionery in the mixed confectionery;

(c)    the question of use as a trade mark was approached on the basis of whether that use would have appeared to consumers as possessing the character of a brand – that is to say, whether the words were used so as to indicate a connection in the course of trade between Nestlé and the confectionery using the registered trade mark;

(d)    upon an examination of the packaging:

(i)    the trade mark words appeared on the back of the packet in the blurb to describe the product as part of a list of different confectionary items;

(ii)    by contrast, on the front of the packet was Nestlé’s well known registered trade mark in that name, and in the brand name Allen’s, denoted as such for both;

(iii)    “luscious” was descriptive and intended to convey a laudatory and perhaps even humorous description of that part of the contents;

(e)    some consumers may read the blurb on the back, and others may not, but for those who took the time to look at it, they would have taken it as essentially a humorous way to describe the contents, not as a badge of origin;

(f)    the impact of the trade mark words was diluted by the prominence of the well-known mark on the front, and it was the two registered trade marks of Nestlé that performed the role of distinguishing its confectionary product from that of others – as the Full Court noted, “[t]he words ‘Allen’s’ and ‘Nestlé’ were prominent, especially when contrasted with the positioning and use of the words ‘luscious Lips’”; and

(g)    Nestlé was not aware of Nature’s Blend’s use of the words “luscious Lips” and therefore had not acted in bad faith.

78    The Full Court in Nature’s Blend (at [38]) quoted the judgment of Allsop J (as the Chief Justice then was) in Anheuser-Busch Inc v Budejovicky Budvar [2002] FCA 390; 56 IPR 182 at [184]–[186] with approval. The ultimate burden of that quote was the importance of context, and the need for the trade mark use assessment to be “made from the perspective of what a person looking at the label would see and take from it, as to the purpose and nature of its use” (his Honour in turn citing Shell Co of Australia Ltd v Esso Standard Oil (Aust) Ltd (1963) 109 CLR 407 at 425). The Full Court (at [41]-[49]) understandably rejected an argument advanced by the appellants that the question of trade mark use should be decided upon the basis that a reasonable consumer would actually read the back of the Nestlé/Allens packet as well as the front, and observed:

[42]    Even if most consumers may look at the back of Nestlé’s packet before purchase or even read the blurb, such an inspection would simply reveal that one of the mixed lollies in Nestlé’s product is described in a light and amusing context as being “luscious Lips”. However, by the time the consumer has read the blurb, if indeed the consumer does so, he or she has already seen that it is in an Allen’s brand of product with the name of the product variant being retro party mix. If the consumer does go on to read the blurb, the consumer is well aware by that stage that the brand and commercial source is Allen’s. Further, on looking at the back of the packet the consumer would also see another very well known trade mark, namely, nestlé. The consumer then is left in no doubt as to the commercial origin of the product by the time he or she has read the relatively long discursive and humorous description referring to one of the lolly varieties as being “luscious Lips”.

…

[48]    The primary judge was correct in taking into account the prominence of the registered allen’s and nestlé marks on the packaging in contrast to the location and style of the expression “luscious Lips”. That approach was entirely in conformity with the authorities on which the primary judge relied.

[49]    Nestlé’s use of “luscious Lips” did not infringe the trade mark.

79    In Shell Co, the use in television advertising of a sign was found not to amount to use as a trade mark, because it was not used as a mark for distinguishing Shell’s petrol from other petrol. The sign was in the form of a figurine in the shape of an oil drop which was relevantly identical to a registered trade mark (sans the trading name of the applicant at first instance and respondent on appeal, “Esso”). Kitto J (with whom Dixon CJ, Taylor and Owen JJ, agreed) observed at 422:

[T]he context is all-important, because not every use of a mark which is identical with or deceptively similar to a registered trade mark infringes the right of property which the proprietor of the mark possesses in virtue of the registration. Section 58(1) of the Trade Marks Act 1955-1958 (Cth) defines that right as the right to the exclusive use of the trade mark in relation to the goods in respect of which the trade mark is registered; and s. 62(1) adds that a registered trade mark is infringed by a person who, not being the registered proprietor, or a registered user using by way of permitted use, uses a mark which is substantially identical with or deceptively similar to the trade mark, in the course of trade, in relation to goods in respect of which the trade mark is registered. … But in my opinion it is implied both in s. 58(1) and in s. 62(1) that the use which is there referred to is limited to a use of a mark as a trade mark.

At 425 Kitto J went on to say that the question was whether the trade mark would appear to a person seeing it as:

[P]ossessing the character of devices, or brands, which [Shell] was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and [Shell]. … [T]he connexion … is a connexion limited by the purpose of the occasion.

The use made of the oil drop was only found to convey the qualities of Shell’s petrol, not its brand or origin.

80    In Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326, Sterling Pharmaceuticals held a registered trade mark over the made up word “caplets”. This was a portmanteau of the words “capsule” and “tablet” in the phrase “capsule-shaped tablets”. Johnson & Johnson used the word “caplets” on packaging and in the course of advertising for its own, competing, product. The trial judge found against Johnson & Johnson both as to infringing use and the good faith exception. That was overturned on appeal on the issue of infringing use, obviating the need for a concluded view on the good faith exception.

81    The proposition advanced by Sterling Pharmaceuticals in Johnson & Johnson was that there was trade mark use if the alleged infringer applies the mark so as to refer to the particular goods. This was rejected by the trial judge. On appeal, Lockhart J (at 335) and Gummow J (at 348) also rejected this proposition, holding that this went too far in expanding the exclusive rights given by trade mark legislation to something akin to literary copyright. Rather, following Shell Co, the question was whether the use made of the mark (viewed objectively, rather than subjectively) was to distinguish the commercial origin of goods or services sold under the mark, in the sense of a badge of origin. If the use is not sufficiently connected in some way to origin, including by reference to appearance and other aspects of context, there will be no infringement. Put another way, in the context of that case, the question was whether Johnson & Johnson’s use of the word “caplets”, which was the subject of the Sterling Pharmaceuticals trade mark, indicated that the source of the formation or quality of the product being sold, or its associated goodwill, was Sterling Pharmaceuticals. The answer was that it did not.

82    Johnson & Johnson is also authority for the proposition that there may be trade mark use and thus infringement where the alleged infringer uses the words with the mark to indicate that it, rather than the owner of the trade mark, is the trade origin of the goods or services in question: Gummow J at 349 citing Caterpillar Loader Hire (Holdings) Pty Ltd v Caterpillar Tractor Co (1983) 77 FLR 123 at 141-2. There may still be infringement even if another trade mark belonging to the alleged infringer is also used on the same packaging. Applying these principles, the Full Court concluded that there was no infringing use. That was because, although the word “caplets” was used, it was plainly and markedly subordinate to Johnson & Johnson’s own trade mark brand name “Tylenol”. The two words were not used in any composite way. The reference to “caplets” was confined to indicating the form or method of dosage of the product, and its ease of use, but not to invite consumers to purchase the product as distinguished from the products of other traders. To put it another way, it was to indicate that the products had a particular quality or characteristic, not as a point of distinction from other traders as to origin.

83    In Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192, a finding of infringing use was unanimously overturned on appeal. The alleged infringer respondent, Pepsico Australia Pty Ltd, had used the term “kettle” on packaging to describe the way in which potato chips had been made. That word was the subject of a trade mark registered to the applicant. The problem for the applicant was that while the word had undoubtedly been used, it was used in a descriptive way, which defeated the alleged use as a trade mark. As Lockhart J observed at 193 (substantially in common with Sheppard J at 201 and Sackville J at 208):

It is easier to find infringement of a registered mark where it consists of a coined phrase (see Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 (the Tub Happy case)) than in a case where the registered mark is a generally descriptive word which has acquired a secondary meaning, so becoming distinctive of the plaintiff’s goods as a badge of origin. The reason is that there is always inherent in a word that is originally descriptive the risk that even when it is used by others in trade it will be used in its original descriptive sense. And of course, where a word that is initially descriptive subsequently acquires a secondary meaning, it remains that use of the word in a descriptive sense cannot be restrained by the proprietor of the trade mark.

84    In Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190 (the Tub Happy case), the use by the alleged infringer of its own brand name in conjunction with the trade mark of the plaintiff did not save it from being infringing use: see Dixon CJ at 194-5. But, as Kitto J pointed out at 197 (albeit in dissent on the issue of a coined phrase), the words “tub happy” occupied a prominent position, leaving the Court in no doubt that those words were used to indicate the defendant’s goods. The defendants attempted to argue the words were essential to advertising the goods as containing cotton fibres rather than woollen fibres and this was rejected.

85    Similarly, in Shell Co the question posed by Kitto J was whether the distinctive oil drop appeared to be “thrown on to the screen” to distinguish Shell petrol from other petrol. His Honour answered that question evocatively at 425:

At every point of the exhibition, whether the resemblance to the respondent’s trade marks be at the moment close or remote, the purpose and the only purpose that can be seen in the appearance of the little man on the screen is that which unites the quickly moving series of pictures as a whole, namely the purpose of conveying by a combination of pictures and words a particular message about the qualities of Shell petrol. This fact makes it, I think, quite certain that no viewer would ever pick out any of the individual scenes in which the man resembles the respondent’s trade marks, whether those scenes be few or many, and say to himself: “There I see something that the Shell people are showing me as being a mark by which I may know that any petrol in relation to which I see it used is theirs.” And one may fairly affirm with even greater confidence that the viewer would never infer from the films that every one of the forms which the oil drop figure takes appears there as being a mark which has been chosen to serve the specific purpose of branding petrol in reference to its origin.

The analogous dichotomy relied upon by the respondents is halal, as opposed to non-halal, goods, rather than trade origin as to halal certification services.

86    In Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721; 96 FCR 107 it was recorded at [19]-[20] that the respondent suggested that Kitto J’s formulation in Shell Co should be adapted so as to pose the question as to whether, just by looking at the respondent’s cola-flavoured confectionary product in the distinctive trade mark registered contour shape of a Coca-Cola bottle, it could be concluded that Coca-Cola Co was the manufacturer of the confectionery. The Full Court rejected that as not being a correct adaptation and as not asking the right question. Rather (emphasis added):

Use “as a trade mark” is use of the mark as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods: see Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 341, 351. That is the concept embodied in the definition of “trade mark” in s 17 – a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else.

The authorities provide no support for the view that in determining whether a sign is used as a trade mark one asks whether the sign indicates a connection between the alleged infringer’s goods and those of the registered owner. [Authority then cited] … the question is whether the sign used indicates origin of goods in the user of the sign; whether there is a connection in the course of trade between the goods and the user of the sign. [Shell Co at 424-5 is then quoted at some length].

The passage in bold above was quoted and expressly approved in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; 241 CLR 144 at [43].

87    It is true that, as Johnson & Johnson at 347-8 makes clear (citing the Tub Happy case), a mark may have a descriptive element but still serve as a badge of trade origin. However, the fundamental question is whether the consumer is being invited to purchase the goods or services of the alleged infringer which are to be distinguished from the goods or services of other traders at least “partly because” (citing the Tub Happy case at 205) they are described by the words in question.

88    In this case, the sole identifying feature of the Trade Mark are the words “Halal Certification Authority Australia”. This gives rise to the question of whether, in context, the words on the Packaging Logo were being used beyond an indication as to the quality or characteristic of being halal, largely because of greater specificity than simply stating that the goods were halal, or even halal certified.

89    Finally, in Halal Certification Authority Pty Ltd v Scadilone Pty Ltd [2014] FCA 614; 107 IPR 23, forged versions of HCA’s halal certificates were created by or at the direction of the managing director of a wholesale manufacturer and supplier of kebabs. The fake certificates were provided to two retail customers by a delivery employee of the same supplier, who also put them up for display at the retail premises without the retailers being aware they were forgeries. The wholesale supplier did not deny that the forged certificates had emanated from it, but unsuccessfully sought to blame a rogue employee who had left Australia.

90    Each forged certificate in Scadilone was to the effect that the wholesale supplier’s goods being sold in the shop were certified to be halal by HCA, when in fact such certification had never taken place. It was at least doubtful that the kebabs were halal at all. Thus use as a trade mark by displaying the forged certificates with the trade mark on them was apparently not in issue in that case. The bulk of the judgment in Scadilone concerned the liability of the two retailers and the personal liability of the managing director of the wholesale supplier company, with Perram J noting at [49] that there was no doubt that HCA’s trade mark on the forged certificates had been used by that company in relation to the kebabs it supplied to the retail outlets.

91    The main points of difference between Scadilone and this case are obvious enough. That case concerned the use of HCA’s trade mark in association with forgeries of halal certificates ordinarily issued by it, not the bare application of a very similar mark to packaging as in this case. A further point of difference is that the goods in this case had, at different times, been certified by HCA to be halal and there was no suggestion that the goods were not in fact halal. Those differences alone mean that the application of Scadilone to the present situation has to be approached with some caution. HCA relies upon findings made by Perram J as to use of its registered trade mark on the forged certificates in Scadilone. However, the context is so different so as to make that conclusion of little assistance in this case. In fact, I consider the facts in Scadilone rather highlight why there is not likely to be an issue as to use in the present circumstances, rather than furthering HCA’s case.

92    With primarily the above cases in mind, as well as the other authorities referred to in the submissions of the parties as a background, I now return to the case at hand.

Infringing use as a trade mark (s 120(1), (2)(c) and (d))

93    A practical and realistic approach permeates many of the authorities as to the inquiry required to be undertaken to assess whether infringement has occurred, as considered in some detail by Sackville J in Pepsico. It is an objective inquiry of substance, rather than mere form, although form in the sense of appearance is doubtless also a feature of substance. The assessment is to be made from the perspective of a person looking at the impugned mark and what such a person would take from it as to the purpose and nature of its use: Anheuser-Busch at 186, citing Shell Co at 425; and Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH [2001] FCA 1874; 190 ALR 185 (Full Court) at [22]-[24] and [76].

94    The onus is on HCA to show infringing use. Has it been established, on the balance of probabilities, that, viewed objectively and in context, the use of the Packaging Logo goes any further than indicating that the contents are halal, and perhaps that someone not clearly identified other than the manufacturer was saying that was so? For the following reasons I have concluded that the answer is “no”.

95    The trade mark infringement case brought by HCA can best be summarised by reference to its closing oral submissions in which an analogy is drawn between a computer and the processor within a computer. When a computer has a logo such as “intel inside” or the equivalent, the logo is not signifying that the computer is made by Intel Corporation, but rather only that the processor is made by Intel. HCA’s case is that the Packaging Logo, being substantially the same as the Trade Mark, would have conveyed to a person looking at the Natvia Products and Raw Earth Products packaging that:

(a)    the contents were halal, or even that they were certified as halal by someone; and

(b)    the trade source of the halal certification service was HCA.

96    By contrast, the respondents’ case is that the size and placement of the Packaging Logo, albeit bearing substantially the same appearance as the Trade Mark, would convey to any consumer who chose to look at it no more than that the product was in fact halal, and perhaps also that it was certified as such, which falls well short of conveying any trade source information.

97    As a first step, I endorse and adopt the conclusion reached by the trade mark examiner, reproduced at [25] above that the words “Halal Certification Authority Australia” are themselves purely descriptive. This is so despite those words constituting the bulk of HCA’s company name. In the absence of the full company name on either the Packaging Logo or the Trade Mark, HCA has an immediate problem in relying upon the words “Halal Certification Authority Australia”, or even the subset words “Halal Certification Authority” as themselves indicating to a consumer the trade origin of the services it supplied. Even this much assumes that it is realistic to conclude that a consumer would even trouble to read those words, which is doubtful given the greater importance of the Arabic lettering signifying halal, and the small size of the logo on the packaging.

98    The live question then is whether a member of the general public, or an ordinary and reasonable reader, would consider that there is any practical difference in using the Packaging Logo as part of a registered trade mark to signify that the products were halal. A recurring example throughout this proceeding was the comparison with the Kosher Logo which also appeared on the relevant Natvia Products and Raw Earth Products. The oral evidence as to the similarities and differences between kosher and halal food indicated that the only substantial difference is that the Islamic faith generally permits rabbits, camels, horses and shellfish to be eaten, while the Jewish faith (and thus kosher) does not. That is certainly not an exhaustive account of the differences, but it does indicate a reasonably high degree of commonality and that much of the food that is kosher is very likely also to be halal. Core limitations of both concern not using porcine products with the addition of limitations on the method of slaughter of other animals.

99    The small display size and relatively obscure placement on the packaging for both the Packaging Logo and the Kosher Logo starkly contrast with the large and dominant size of the “Natvia” and “Raw Earth” trade marks. These trade marks were registered to Flujo Sanguineo, and were the names by which the two types of products in issue were overtly sold. The English words on the Packaging Logo and the Kosher Logo are difficult to read. While it is true the words “Halal Certification Authority Australia” are clearer than the equivalent words on the Kosher Logo, they are both more troublesome to read than just the more immediate “K” symbol and the Arabic lettering indicating halal.

100    Most consumers or other casual readers would probably not even notice that the logo was there, even when they are on the shelf at home, given that the logos are situated on the side of the packaging, usually underneath or near the nutritional information. Annexures MOC-1, 3, 4, 6, 7, 12 and 13 to Mr O’Connor’s affidavit demonstrate this. Annexure MOC-10 to the same affidavit also provides a useful view of what a shopper would see when viewing the Raw Earth and Natvia Products at the supermarket: nearly all of the products are displayed such that the Packaging Logo is not visible. Even when one of the Natvia Products is turned on its side (specifically, either the Natvia 40 x 2g sachets 80g pack sweetener, or the Natvia 80 x 2g sachets 160g pack sweetener) the Packaging Logo is not discernible at any level of clarity, let alone sufficient to see the printing of the words “Halal Certification Authority Australia” while browsing. Finally, in Annexure MOC-8, there is a closer-up picture of some of the Natvia Products, where they appear to have been turned such that the Packaging Logo is clear to the camera. Even in this close-up view, where the products have been positioned for better clarity, it is impossible to make out the words which are on the Packaging Logo or the Kosher Logo from that distance. A shopper would most likely go no further than the immediate “K” symbol and the Arabic lettering indicating halal, which are still somewhat clearer at that distance.

101    In the absence of any direct evidence from any consumer or any independent experts as to how packaging of this kind either was, or was likely to be, read by a consumer, the Court is left to make inferences and draw other conclusions on the face of the packaging. The respondents addressed this briefly; HCA barely at all. The above consideration is more detailed than any submission made.

102    HCA also sought to make use of the evidence of Mr Hanna in cross-examination, and the pleading in relation to the good faith defence in s 122(1)(b)(i) of the Trade Marks Act at [17(d)] of the defence, both of which went to the subjective purpose of using the Packaging Logo. However, it is difficult to see how that subjective purpose will ordinarily serve any useful purpose in relation to the objective assessment of whether there has been use as trade mark, unless, perhaps, it has some direct bearing on the objective assessment required to be carried out. I found that evidence, pleading point, and argument, of no assistance at all in that objective assessment.

103    That is especially so as, if anything, a key part of that evidence did not assist HCA. In cross-examination, senior counsel for HCA put to Mr Hanna that in displaying the Kosher Logo on products, the relevant entity of Flujo Group was trying to communicate two distinct messages to customers: (1) that the product is kosher, and (2) that “an authority you can trust has checked that they comply with Kosher laws”. Mr Hanna accepted that point. Mr Hanna was then asked if he considered it important that the customer knew who it was that certified the product as kosher, to which he responded in the affirmative, but also said that he did not know if customers knew the difference between kosher labels. Mr Hanna was then asked again, whether, irrespective of whether or not the customer knew who had done the kosher certification, Flujo Group wanted to assure the customer that somebody who had authority to do so carried out the kosher certification. Mr Hanna agreed. During these questions, senior counsel did not make any reference to Flujo Group attempting to convey that any particular entity had certified the products as kosher, only that they wanted to convey that they had been certified as kosher by a credible source.

104    Senior counsel then asked a question about Flujo Group attempting to take advantage of the trusted reputation of a particular organisation, Kosher Australia, to which Mr Hanna said (emphasis added):

… when we started the business, we didn’t go and do homework or research on Halal or Kosher at all. That – that – that’s what was presented to us. So, you know, it was – it was new to us and we don’t know how many people would know difference between different Kosher certifications or different Halal certifications. For us the most important thing was just to be able to – if we said it was Halal to be able to verify it and I don’t know anything about your client[’s] credibility or how much, you know, the public knows about their logo, or vice versa for Kosher. So, in essence, it was for us just to be able to simply clearly demonstrate to consumers that it was Halal.

105    As noted above, the subjective intention of both HCA and the officers of Flujo Group are of no assistance in the objective determination regarding the use of the Trade Mark. However, with all of the facts viewed objectively, the emphasised last sentence of Mr Hanna’s evidence above correctly reflects what ultimately did occur.

106    The use of the word “kettle” in Pepsico, and the use of the words “luscious Lips” in Nature’s Blend were essentially descriptive, while the use of the phrase “Tub Happy” in the Tub Happy case was not. Unless the situation fits into the latter scenario, so as to be useful beyond being descriptive (here as to the goods being halal, or even perhaps certified as halal) there would be no infringement. That is a substantial hurdle for HCA in this case. The Arabic characters in the Trade Mark are starkly of that descriptive character, conveying in context that the goods are halal. The rest of the Trade Mark is otherwise substantially made up of words that have been refused registration as a trade mark because they are “entirely” of that descriptive character. These are the two main elements of the Trade Mark, plus the annulus. It is difficult in this case to see how these two descriptive elements could be more than descriptive when paired together, short of a level of market recognition which would create recognition of the Trade Mark beyond description. I am not satisfied that, in this case, the whole of the device conveys more than the sum of its parts.

107    This is especially so outside the context of, for example, a certificate issued by HCA as to a product being halal, which forms no part of the conduct relied upon as being allegedly contravening. On HCA’s case, it is not enough that a consumer looks at the Packaging Logo and sees the Arabic lettering and even the word “halal” in English: what must also be comprehended is the phrase “Halal Certification Authority Australia”, and that entity is understood to be the source of a certification service provided for that product. The consumer must not just read all of the Packaging Logo, but must also interpret what it means and conveys in terms of a particular organisation providing a particular service. That is quite a lot to predict and infer that a person shopping at a supermarket is likely to bother to do. That is especially so as these were not products which carried a substantial risk that they might not be halal, such as meat. These were products which would not be likely to attract such a high level of scrutiny from a customer, even one who comprehended that the goods were being sold as halal.

108    A long line of appellate authority in this Court and in the High Court in consumer protection cases have held that the dominant message in an advertisement, which extends to packaging, is of some assistance in the objective determination of the use of the Trade Mark: see, e.g., Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [45]. If conduct by way of representations can be seen to be directed to a particular class of persons, that is to be judged by its likely effect on a reasonable member of that class: Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; 202 CLR 45 at [103]. That general approach helps to inform the assessment of the way in which packaging is, objectively, likely to be perceived by consumers, who are equally likely to pay heed to dominant messages when it comes to the use of logos.

109    The members of the class of consumers concerned with whether or not goods are halal are not going to be entirely homogenous. They will likely vary in the presence or absence of different degrees of religious abstinence or devotion. They may have other health or diet concerns, or be concerned to meet the dietary needs of others, such as their friends, relatives, customers or employees. They will have differences in education, in intelligence, in perception and related skills, in time spent evaluating the packaging, and in the degree of distraction or preoccupation by reason of such things as shopping for other items. They will also be affected by evanescent factors such as the attraction or interest generated by the way in which the packaging more generally presents.

110    It must be kept steadily in mind that the products in issue in this proceeding are in the greater part artificial sweeteners. They are not products likely to be perceived as being at a high risk of not being halal, at least for those who actively care about this characteristic. As such, the Arabic script may perform the function of reassurance for the consumers who trouble to check the product’s halal status, or otherwise notice the Packaging Logo. The annulus may perform the additional function of conveying to the consumer that the representation is more than a bare assertion, even if the concept of certification may or may not be conveyed. The source of that representation, assuming it can be readily ascertained, may not matter to many, if any, consumers.

111    The key component of the Packaging Logo and Trade Mark (if only by size, prominence and visibility to a casual or even attentive reader, as presented in the images at [16]-[17] above) is the Arabic script meaning “allowed or permitted in accordance with Islamic rites”, in practice and effect conveying that the contents are in fact halal. The annulus is likely to be the next most important component, because it may be perceived as having some greater degree of formality as to the halal representation. The words within the annulus is likely to be of the least significance, especially as they are hard to make out on the packaging in evidence.

112    On the state of the evidence, I am unable to conclude on the balance of probabilities that any reasonable person, especially conducting supermarket shopping, would be likely to read the words “Halal Certification Authority Australia”. I am not satisfied that, given the lack of prominence, such a person would be likely to concern themselves with who was asserting goods were halal, let alone whether and if so by whom certification to that effect had taken place, and thereby have conveyed to them anything about trade origin of the certification service. That is, the presence of the words “Halal Certification Authority Australia”, which of themselves are of limited significance anyway in light of their entirely descriptive character, has not been shown, on the balance of probabilities, to result in use as a trade mark. That is, I infer from the appearance of all the packaging in evidence:

(a)    that the Packaging Logo is most likely to be read by a consumer looking for an indication that the product is halal;

(b)    that anyone who did see the Packaging Logo, whether by reason of looking for it, or happening to notice it, and viewing it as a whole having regard to what is more prominent or otherwise easier to see, and less prominent or otherwise harder to see:

(i)    is unlikely to look at it more closely than perceiving the Arabic script contextually conveying that the product is halal, and perhaps also the annulus;

(ii)    is quite likely to perceive that the product is halal and that somebody beyond the manufacturer is asserting that to be so, whether or not they have in mind anything as formal as certification;

(iii)    is very unlikely, to the point of de minimus, to have conveyed to them who is asserting that the product is halal, principally because of the effort required to make out the very small words “Halal Certification Authority Australia”.

113    By contrast, the dominant use of a trade mark registered brand name – Natvia or Raw Earth – to sell the goods, can be objectively seen to have functioned as the trade source of the goods, with nothing being likely to indicate clearly, if at all, a trade source for any related service of halal certification. The dilution effect of those trade mark brand names as against the relatively small and insignificant presentation of the Packaging Logo in this case, and the even smaller presentation of the words “Halal Certification Authority Australia” was even stronger than it was in Nature’s Blend, to the point of obliterating any realistic residual possibility that might have existed of use of the Packaging Logo as a trade mark.

114    There is nothing that I discern about the use of the Packaging Logo, having regard to its size and location, that meets the threshold of it being used as a trade mark for services. It simply would not be likely to be regarded by any reasonable consumer as any kind of indication of trade origin of any certification service. I am therefore not satisfied that applying the Packaging Logo to the Natvia or Raw Earth products entailed use as a trade mark for a service for the purposes of s 120(1) of the Trade Marks Act. This reasoning applies with equal force and effect to the halal certification services which HCA provided, and in relation to the Natvia Products and Raw Earth Products which were closely related to those services for the purposes of s 120(2)(c) or (d). This is because the threshold of use as a trade mark at all, in the chapeau to s 120(2), is not overcome, for the same reasons: see Lion Nathan at [71].

115    Moreover, the specific additional hurdles in paragraphs (c) and (d) of s 120(2) have not been surmounted by HCA.

116    As to s 120(2)(c), the weakness in HCA’s argument is revealed by their submissions on this point, in which it is asserted that the respondents have purported to undertake the services of issuing halal certification, “albeit to themselves”, which is hardly the perspective of the ordinary consumer or other reader. In no reasonable sense could it be said that the respondents were, or were purporting to, or would be likely to be perceived as, providing services of the “same description” as those that form part of the trade mark registration in class 42, namely “scientific and technical services; issuing halal certification to businesses and individuals for goods and services if religious and technical requirements are met”. In keeping with the findings above, all that was happening was the selling of the Natvia Products and Raw Earth Products under their own registered trade mark name brands, using the Packaging Logo to signify that the goods had the quality of being halal, and perhaps that someone other than them was saying so. For any consumer who read further (and likely with some difficulty, given the size of the Packaging Logo), if the words Halal Certification Authority Australia readily and on their own conveyed that certification had taken place, that might lead to an inference as to who the certification was by, and that the certification was by a separate entity. But that involves a process of interpretation and inference that I am not satisfied any reasonable consumer or other reader would be likely to conduct.

117    As to s 120(2)(d), and the assertion that the goods being sold were “closely related” to those registered services, there needed to be established some relationship between the products and the Trade Mark, not just that the Packaging Logo on the packaging for the goods therein indicated that the goods had a particular desirable feature, quality or characteristic. In that sense, any such relationship was at best always going to be very limited. No real attempt was made by HCA to demonstrate any such relationship. The respondents did provide some written submissions as to whether the goods could be considered closely related from a “business point of view”, but ultimately this view also had no bearing on my conclusion, as I will outline below.

118    In HCA’s closing note of evidence references, in relation to the question of whether Flujo Group had used the Trade Mark in respect of closely related services, I was directed to the proposition that “correspondence in the channels of trade is no longer a very helpful line of inquiry”, a statement by the primary judge, quoted by Allsop J (as the Chief Justice then was) in the Full Court decision of Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184; 164 FCR 506 at [188]. This perhaps explains HCA’s lack of explanation about the relationship. However, this proposition is taken out of context in the way it was applied by the Full Court. As Allsop J explicitly stated in Colorado (at [190]), his Honour gave greater weight to the question of channels of trade in reaching the conclusion on the relationship between goods than the primary judge, even though this did not lead to a different outcome. His Honour also stated that the question is one of impression and judgment that might be formed by a primary judge. Therefore, to the limited extent I consider it is relevant, I conclude that the evidence revealed that indicating that the goods were halal, and even the additional step of halal certification, was a marginal feature, added only because it did not cost anything extra. Correspondingly, it had little or no discernible effect on sales. The Packaging Logo was objectively used in a way that was informative in a marginal way on the products, but perhaps of some importance to some consumers by way of reassurance. The sweeteners in packaging marked in this way were not closely related to halal certification.

The good faith exception (s 122(1)(b)(i))

119    In case I am wrong about the conclusion I have reached about use as a trade mark, it is prudent to state concisely the conclusion I would have reached on a number of otherwise potentially determinative issues had the question of use instead been resolved in favour of HCA:

(1)    Did the respondents or any of them have permission to use the Trade Mark, and how does this relate to good faith?

(2)    Was any use as a trade mark done in good faith to indicate the quality and characteristics of being certified as halal by HCA, and if so, does that amount to a defence to infringement, as provided by s 122(1)(b)(i) of the Trade Marks Act?

(3)    Is Flujo Sanguineo, the parent company and holder of the trade mark under which the Natvia Products and Raw Earth Products were sold, also liable for any trade mark infringement?

(1)    Permission and good faith

120    The evidence (as partly summarised above) indicates that if the use to which the Packaging Logo was put would have amounted to infringing use of the Trade Mark, HCA did not give actual permission for that to take place, at least by the time of the conduct complained of. The furthest the evidence went is that HCA allowed both contract manufacturers to apply the Trade Mark to the packaging of products, which may have reasonably led both those manufacturers and thereby the respondents to think that there was such permission. HCA relies on its contractual agreements with Hellay and Techniques, and the lack of any agreement with any Flujo Group respondents, to demonstrate there was no permission given.

121    As outlined above, the commercial arrangement was that HCA certified the toll manufacturers for Flujo Group, where they were likely aware that at least some of the products manufactured within the factory were not retailed by that manufacturer, and knowing at least that the manufacturer did not produce packaging for retail. This makes the proposition that no implied permission was given to the retailer to use the logo, purely because of an absence of a direct contractual relationship, difficult to accept, as it would certainly not be the toll manufacturer obtaining the benefit of having permission to use the logo. However, failure to take steps to prevent use, or giving samples of the logos to the toll manufacturer, or not actively disallowing use is not the same as giving permission. Equally, a mistaken assumption or perception as to permission is not a substitute for permission actually being given. It follows that I find that permission was not given. While the issue of permission is not determinative in and of itself, the existence of such a perception, fairly arrived at, is relevant to good faith.

(2)    Good faith defence

122    I am satisfied that the respondents genuinely used, and intended to use, the Packaging Logo to indicate that the Natvia Products and Raw Earth Products had the quality and characteristic of being halal and certified as such by HCA, notwithstanding my conclusion that this goes much further than a reasonable consumer or other reader would conclude. There was no issue of the respondents engaging in any clandestine use, or that HCA had not been on notice of this use, both past and potential. That much is to be gleaned from the reasoning leading to the conclusion as to use. However, discharging the burden of good faith was a more exacting task.

123    The conclusion I have reached is that, following Johnson & Johnson at 354-5, Mayne Industries Pty Ltd v Advanced Engineering Group Pty Ltd [2008] FCA 27; 166 FCR 312 at [105] and Flexopack at [108]-[111], the essential concern going to good faith is that the infringing use be honest. Also relevant are:

(a)    that there be an absence of any “conscious and deliberate acts to undermine the registered owner or the integrity of the trade mark”: Mayne at [105];

(b)    that there be a lack of any attempt to undermine the registered trade mark by the “assiduous efforts of an infringer”: Johnson & Johnson at 355 quoting Re Bali Brassiere Co Inc’s Registered Trade Mark and Berlei Ltd’s Application (1968) 118 CLR 128 at 133;

(c)    that there be no “ulterior motive”: Johnson & Johnson at 353; and

(d)    that any shortcoming found to be present merely due to a lack of subjective knowledge or inquiry is not of a kind apt to “undermine the utility of a registered trade mark”, including by turning ignorance and failure to take reasonable steps from a vice into a virtue: Flexopack at [118].

124    On the evidence, I accept that the approach to ensuring that certification had been obtained was lax. While there was no apparent issue as to the goods in fact being halal, the issue of certification was addressed in an ad hoc and incomplete way. For some time, there was no halal certification in place at all: Mr Hanna’s evidence was that it may have been seven months for Hellay after they were first engaged Flujo Group. HCA submitted that this period was not an oversight. It further submitted that the “trigger” for Flujo Group’s compliance was the point at which they wished to retail in the United Arab Emirates. While I do accept it was the trigger for discovering the oversight, I do not accept that the seven month lapse in certification was intended.

125    Mr Hanna’s evidence was that the period where the Natvia Products were not certified was an oversight as a result of the collapse in the relationship with Techniques and the transition to Hellay. For at least some of this period, this meant that Flujo Group was without access to stock, or the means to manufacture goods. Mr Hanna’s evidence was these circumstances caused “stress” and the halal certification was overlooked unintentionally where the prevailing question was keeping the business operating for Natvia. I accept this explanation for why this occurred. Mr Hanna, and through him Natvia, and the other relevant entities of Flujo Group, at all times believed that the products were halal certified. When it was brought to Flujo Group’s attention by a retailer in the United Arab Emirates that there was no certification, the situation was rectified.

126    As to the later certification issue concerning Raw Earth, Mr Hanna’s evidence was that the absence of certification by Hellay was ascertained upon HCA issuing the letter of demand on 3 August 2018, and shortly after Mr Hanna asked for certification to be obtained by the manufacturer Hellay. HCA then commenced these proceedings in September 2018. Mr Hanna was informed by Hellay in September-October 2018 that the new certificate was being withheld because of these proceedings. As detailed above, it was only in July 2019 that HCA retroactively amended the last certificate issued to Hellay, removing products which encompassed the Raw Earth and Natvia Products, because of asserted “continuing non-compliance”. In this circumstance, it is again clear that Flujo Group quickly took, or attempted to take, necessary steps to seek certification where it became clear that it was not in place. It was only HCA itself which seemingly prevented this.

127    It is significant that whenever a lack of certification has been brought to their attention (up to the point of the commencement of this proceeding, which I will address below) the respondents have attempted to rectify it by seeking certification of the relevant product in the manner which would be most appropriate to do so in the context of the operation of their business – that is, via the toll manufacturer, who holds the certification relationship with HCA. I do not accept HCA’s submission that Flujo Group did not seek to make amends in respect of the Natvia Product certification issue in 2015-16. Subsequently requesting that the contracted manufacturer seek certification of the products, which they did, seems to be the most complete way of making those amends. No doubt HCA’s preferred means of amends would have been the payment of $500,000 in damages that it initially requested in its 3 August 2018 letter of demand, an issue to which I will return.

128    HCA also submits that Flujo Group could not be acting in good faith, because the Natvia Products and the Raw Earth Products used the Packaging Logo after the time that Mr Hanna said that Flujo Group began to take steps to remove it from its packaging in August 2019, presumably after the certificate removing its products was provided to Hellay. Several examples of this were provided, as annexed to the affidavit of Ms El-Mouelhy sworn 29 June 2020, two affidavits of Mr Hanna, and during the cross-examination of Mr Hanna. The following is a summary of those examples:

(a)    Within the text of Ms El-Mouelhy’s affidavit there are a number of observations as to the products manufactured for and on behalf of Flujo Group, and asserted times and dates of manufacture.

(b)    Annexed to Ms El-Mouelhy’s affidavit, there are scans and photographs of packaging, with varying degrees of quality, some bearing printed manufacturing dates, being, in substance:

(i)    Natvia 40 x 2g sachets 80g pack sweetener, with a stamped manufacturing date of 6 January 2020;

(ii)    Natvia 40 x 2g sachets 80g pack sweetener, with a stamped manufacturing date of 23 March 2020;

(iii)    Natvia 80 x 2g sachets 160g pack sweetener, with a manufacturing date of 14 November 2019;

(iv)    Natvia 350g canister, which did not have a visible manufacturing date, but a best before date of 25 November 2022;

(v)    Raw Earth 40 x 2g sachets 80g pack sweetener, with a stamped manufacturing date of 2 December 2019; and

(vi)    Raw Earth 200g canister sweetener, with a stamped manufacturing date of 6 September 2019.

(c)    Annexed to the affidavit of Mr Hanna affirmed 19 December 2019, an image of the design of the current label artwork for the Natvia 40 stick pack.

(d)    In the affidavit of Mr Hanna affirmed 25 September 2020, the statement that “From July 2019 the Natvia business took steps to cease use of the HCA Logo, although it had large volumes of product already on the market or being distributed or produced with the HCA Logo on the packaging.” The bold part of that statement was omitted from HCA’s closing submissions on this point.

(e)    In the course of cross-examination of Mr Hanna, senior counsel for HCA identified a product produced by Flujo Group called More Berry, bearing the Packaging Logo, and a manufacture date of 6 January 2020. During cross-examination Mr Hanna stated that the product was introduced between “12-15 months ago”, being the period between July 2019 and October 2019.

129    What is clear from the evidence summarised above is that 23 March 2020 is the latest manufacturing date that HCA can rely upon as evidence of use after the expression from Mr Hanna that Flujo Group would begin to cease use of the logo, approximately 8 months after that statement. While no evidence was provided as to the amount of time between the preparation of packaging and manufacture of the actual product by the toll manufacturer, there was clear evidence that Flujo Group sells products on a worldwide scale, and at least in some of Australia’s largest supermarket chains. I am therefore prepared to accept that there was likely to have been packaging prepared prior to August 2019 which would still have been used for manufacturing some time after that action was taken. For this reason I do not place much weight on the timing of the More Berry product release as it is likely this packaging was designed and/or produced either during or before August 2019.

130    That said, it would have been appropriate for Flujo Group to be more active about the removal of the Packaging Logo from circulation, particularly once it made the decision to do so and as more time passed, after the relevant products were removed from the certificate issued to Hellay on 25 July 2019. It also appears, as asserted in HCA’s closing submissions by reference to [14] of Ms El-Mouelhy’s 29 June 2020 affidavit, that the decision to cease using the Packaging Logo was not communicated to HCA at any time.

131    However, since the first cross-claim was filed by the respondents on 24 December 2018, there was a live question as to whether there was any prima facie trade mark infringement at all. This is particularly so as, up until 25 July 2019, Hellay still held a halal certification which covered products which were the same as those produced by Natvia (and Flujo Group reasonably believed that the Raw Earth products were also covered by that certification). When that certification was revoked, and, on Mr Hanna’s evidence, it became clear that the ongoing proceedings were not going to settle, Flujo Group asserts that it began to take steps to remove the Packaging Logo.

132    Regardless of whether or not these steps were taken in a timely enough fashion, it is difficult to see in this context how refraining from taking these steps until that time was an act of bad faith, or even an absence of good faith. HCA effectively asserts that the only way good faith could have been achieved, in a scenario where active litigation was occurring, was for Flujo Group to comply completely with the claim and demands being made against them without them being made out. I do not accept that this amounts to bad faith, or even an absence of good faith. HCA also submits that Flujo Group attempted to “conceal” the use of the Packaging Logo from HCA until that point. I reject this, as there was never any evidence that the use of the Packaging Logo was concealed from HCA. On the contrary, there was evidence that HCA did know that the logo was being used, as outlined above in my reasons related to use.

133    HCA also submits that Mr Hanna’s evidence as to the operations of Flujo Group and other related entities, both in affidavits and cross-examination, caused him to be contradictory and “defensive”, and that he was “reluctant” to concede points related to the governance of Flujo Group. Some of this evidence was objected to by counsel for the respondents at the time on the basis of relevance, and I allowed the questions to continue, as they were tangentially related at least to some of Mr Hanna’s affidavit evidence. As it stands now, it is clear that that evidence and those matters are not related to any of the issues of this matter, and do not provide any probative insight into the good faith conduct of Flujo Group. I do not find that Mr Hanna was unduly defensive or reluctant to answer questions at any point in his cross-examination. In my view, he provided generally satisfactory answers to the questioning, and was generally prepared to be corrected, or provide further explanation, when confronted with evidence which challenged those answers.

134    HCA submits that Flujo Group were “on notice” of their concerns once a letter of demand was sent by their solicitor on 3 August 2018, which is in evidence. This letter sheds important light on the proceeding that has subsequently emerged. The demands were that Flujo Sanguineo, Natvia and Raw Earth:

(a)    cease all use of the Trade Mark, including reproducing the Trade Mark on the packaging of products produced by them;

(b)    deliver up for destruction all packaging under the possession or control of Flujo Sanguineo to which the Trade Mark or any other mark that was confusing or deceptively similar to the Trade Mark had been applied;

(c)    deliver up for destruction all products produced by Flujo Sanguineo, Natvia and Raw Earth under the possession or control of Flujo Sanguineo which had the Trade Mark or any other mark that was confusing or deceptively similar to the Trade Mark applied to it;

(d)    undertake a global recall of all products and packaging produced by Flujo Sanguineo, Natvia and Raw Earth which displayed the Trade Mark or any other mark that was confusing or deceptively similar to the Trade Mark;

(e)    undertake, by way of statutory declaration, to never in the future make any use of the Trade Mark without prior written authority from HCA; and

(f)    pay damages in the sum of $500,000 for trade mark infringement.

The date for compliance with all of the above requests was 10 August 2018, being one week (five business days) later, and in the event that that was not achieved, legal proceedings would be commenced.

135    As a practical matter, the demands made by that letter are such that it would have been nearly impossible for Flujo Group to comply within the specified timeframe. The demand for payment of half a million dollars in damages was made without indication of how that sum was arrived at. Nowhere in that letter is the issue of certification of the products even mentioned. Despite this, HCA seeks to rely on the lack of interaction or commercial relationship with the retailer entities of Flujo Group as a forceful point in respect of them not having permission to use the Packaging Logo. It also relies upon assertions that Flujo Group was not diligent enough in seeking copies of certificates, contemporaneous correspondence about those searches, or consulting terms and conditions in respect of their good faith obligations.

136    There was no evidence of any direct relationship between HCA and Flujo Group companies. While it is submitted by the applicant that Flujo Group was unwilling to contact HCA to “discuss certification, requirements to pay additional fees, or packaging”, there is no evidence that between 2010 and 2018, HCA made any attempt to create such a direct relationship or separate agreement either. That has an important bearing on the degree of conscientious consideration that could reasonably be expected to enliven good faith between the parties. This is particularly so in circumstances where HCA seemed willing to devote resources to preparing for a legal stoush with Flujo Group, as demonstrated at the earliest by the letter of demand, but not to developing a legal relationship.

137    This is particularly stark, as the evidence of Ms El-Mouelhy was that “every single one of our clients in 27 years holds an agreement” and gave examples of agreements with entities like Multra, Omniblend, and Mars. Further, the evidence of Mr El-Mouelhy was that if HCA was aware that Natvia had been using the Packaging Logo, Natvia would have “paid through the nose” to use it. The competing arguments present two quite inconsistent, although not entirely mutually exclusive, explanations for what has taken place:

(a)    Flujo Group acted in bad faith by intentionally failing to ensure two instances of halal certification for their products. They used the Packaging Logo on the products over a number of years without permission, while distributing their products on a wide scale and intentionally hiding this conduct from HCA; or

(b)    Flujo Group was not acting in bad faith, and rather HCA was being opportunistic upon its realisation of a missed commercial opportunity in not billing both Techniques/Hellay and Flujo Group for use of the Packaging Logo or Trade Mark in the way that companies like Mars were was billed. Following the apparent success and wide distribution of the Raw Earth and Natvia Products, it commenced this action as a means to recouping what it viewed to be lost fees that it had not charged.

138    Given the $500,000 claimed in HCA’s initial letter of demand, and the other strong demands in that letter, I consider option (b) above is a more credible characterisation of what has taken place. That view casts a damaging shadow over HCA’s case, and at least causes me to doubt on the characterisation of events by HCA that there was any lack of good faith on the part of Flujo Group.

139    Adding to this, Ms El-Mouelhy, in her oral evidence, also made it very clear that she was aware what evidence may constitute “bad news” for the respondents (above at [49]), or which arrangements as to certification would cause Flujo Group to “be in a lot of trouble” if they were not complied with. The evidence of Mr El-Mouelhy at [59] and [137] above demonstrated a similar knowledge of conduct which would be influential in this case, and the commercial motivations driving the claim. The oral evidence of both the former and current directors of HCA, Mr El-Mouelhy and Ms El-Mouelhy, did nothing to dissuade me from the view that the arguments as to how the conduct of Flujo Group could be understood to be beyond the bounds of good faith should be accepted with some trepidation, at best.

140    Further, the evidence of Ms El-Mouelhy that there was an agreement between Techniques and Natvia where the “onus” was on Natvia to check the certification status of the products cannot be given any weight. As it relates to the good faith question, whether or not it was the case that it was Techniques’ responsibility to obtain the certification, it is clear that Flujo Group was willing to step in where needed to ensure that certification was in place, once alerted to any problem. This is the more relevant conduct.

141    In light of the above, I have concluded that if the use had been infringing, it would nonetheless have been honest, without any conscious or deliberate act to undermine HCA as the registered owner of the Trade Mark and the integrity of the Trade Mark. In no sense did the conduct of any of the respondents constitute the “assiduous efforts of an infringer”, adopting the terms of Re Bali. While the evidence revealed that no permission was given to Techniques or Hellay to use the Packaging Logo, it has not been made out that Flujo Group had any ulterior motive in seeking to get the contract manufacturer to obtain certification, and in thinking that through that certification they had the right to label the goods as being halal.

142    Thus I have concluded that sufficient creditworthy features were present and that the necessary serious adverse characteristics were substantially or wholly absent in respect of Flujo Group’s conduct. While the respondents could and should have been more careful, I am satisfied that they made an honest and bona fide attempt to obtain certification that the products in question were halal before using the Packaging Logo. They, through Mr Hanna, genuinely and largely reasonably, did not think that they were doing anything wrong. I conclude that had infringing use been made out, the defence in s 122(1)(b)(i) would have been made out.

(3)    Liability of Flujo Sanguineo

143    Finally, I am satisfied that parent company Flujo Sanguineo would also have been liable for any trade mark infringement. Flujo Sanguineo was the only named legal entity on the packaging, by reference to the registered trade marks under which the Natvia and Raw Earth Products were sold. Mr Hanna made this much clear in his evidence in cross-examination, including as to overall control over the design and packaging and the granting and termination of licences to use those trade marks.

Conclusion on infringing use

144    For the foregoing reasons, HCA’s case on infringing use fails.

Misleading or deceptive conduct (ACL s 18(1)); false or misleading representations (ACL s 29(1)(a), (b), (g) and (h)) and passing off

145    HCA relies upon the summary of principles by Beach J in Flexopack at [259]-[273], which includes a discussion of misleading or deceptive conduct and false or misleading representations on the one hand, and passing off on the other. The ACL provisions have a broader scope, but also provide guidance for an assessment of the narrower passing off allegations.

146    The essence of the case for HCA is that by the existence and use of its name and Trade Mark, including the provision of services, it acquired a substantial and valuable reputation, and that:

(a)    from at least 31 July 2018 Flujo Sanguineo and/or Stevia (previously Natvia) and later from at least 6 January 2020, Flujo Sanguineo and/or Natvia IP, have represented to traders and consumers in Australia in relation to the Natvia Products; and

(b)    from at least 1 August 2018, Flujo Sanguineo and/or Raw Earth have represented to traders and consumers in Australia in relation to the Raw Earth Products that:

(i)    the Natvia Products or Raw Earth Products are or were certified by HCA as being halal products, when they are and were not;

(ii)    the Natvia Products or Raw Earth Products are or were certified in accordance with requirements specified by HCA, when that was not so;

(iii)    the Natvia Products or Raw Earth Products are or were manufactured, advertised, promoted, exhibited, offered for sale, distributed and/or sold in Australia with the sponsorship or approval of HCA, or in affiliation with HCA, when they are and were not; and

(iv)    each had sponsorship, approval or affiliation with HCA, when they did not.

147    The same circumstances above are relied upon to establish that:

(a)    in trade or commerce and in connection with the supply or possible supply of those products, there was a contravention of ss 18(1) and 29(1)(a), (b), (g) and (h) of the ACL; and

(b)    the tort of passing off by the representations causing and continuing to cause the public, traders and consumers in Australia to believe that Flujo Group’s products are certified by, are services which are provided by or under the authority of, and are services which have the sponsorship or approval of, HCA.

148    In substance, HCA’s case for both the ACL claims and the passing off claim turns on how the Packaging Logo would be perceived by persons who saw the packaging. In my view these claims must fail for the same factual reasons as the trade mark infringement case. I am not satisfied that the use of the Packaging Logo would have been likely to have the effect that is alleged. This is because I am not satisfied, on the balance of probabilities, that it would have been conveyed to any reasonable consumer, and thus any other member of the public or any trader, that HCA had in fact certified the products, or had provided certification services or that there were services which had the sponsorship or approval of HCA.

149    I am not satisfied that the impugned conduct had any sufficient tendency to lead a person exposed to it into the errors asserted: see Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130; 278 FCR 450 at [22], which in these circumstances equally applies to the passing off allegations. I am unable to accept that anyone was likely to be misled or confused in respect to HCA or its services by the proven use made of the Packaging Logo. As already noted, the Packaging Logo was not apt to convey with any reasonable degree of clarity anything more than that the goods were halal. It is likely that it would also convey that someone other than the manufacturers were confirming that the products were halal, a point which is considered in more detail in the cross-claim. However, I am not satisfied that it would have been perceived by an ordinary customer to have the necessary connection to HCA. This conclusion applies with equal force and effect to the serious allegation of passing off.

150    Even if I was wrong about the above, HCA relies upon bare assertion evidence from Mr El-Mouelhy and Ms El-Mouelhy as to the loss and damage they each say HCA has suffered, but provides nothing concrete upon which to be satisfied that any such loss or damage has in fact occurred or was even likely to have occurred, before any issue of quantification arises. The case rises no higher in substance than a complaint about missing out on licensing fees that might have been charged. Furthermore, I am not satisfied that, had the respondents been required to choose between paying any licence fee to HCA and not using the Packaging Logo, they would have paid any licensing fee at all. A significant reason for that conclusion is that the certification and use of the logo was paid for and obtained by the toll manufacturers, who in turn factored that charge into the fees then issued to Flujo Group.

151    In light of the foregoing, it was not necessary to make any findings about HCA’s reputation, other than to observe that the evidence on this topic was in a limited compass and largely self-serving, and unsupported by objective evidence. If HCA had any reputation to protect, its existence was not advanced except by assertion, and certainly not convincingly shown to be substantial. Further, I consider that any status it does assert in relation to its government recognition only aids the argument in the cross-claim, in that it is likely to deceive or cause confusion as representing itself as a government authority.

Conclusion on ACL and passing off claims

152    Halal Certification Authority’s ACL case and passing off case must also fail.

Conclusion on the originating application

153    The second further amended originating application must be dismissed with costs because all of the bases for the relief sought have failed.

Cross-claim as to validity of the Trade Mark

154    The second to fourth respondents, Stevia (formerly Natvia), Raw Earth and Natvia IP (the cross-claimants), by a further amended statement of cross-claim, seek the following relief:

(a)    rectification of the register by cancellation of the Trade Mark:

(i)    under s 88(2)(c) of the Trade Marks Act upon the basis that its use (at the time of filing the notice of cross-claim on 24 December 2018, or of filing the statement of cross-claim on 4 April 2019) was likely to deceive or cause confusion; and/or

(ii)    under s 88(2)(a) of the Trade Marks Act upon the basis that its registration could have been successfully opposed at the time it was sought under s 41 of the Trade Marks Act because it was not (at the date of filing the application for registration on 8 June 2004) inherently capable of distinguishing HCA’s services from the services of other persons; and/or

(b)    removal of the Trade Mark from the register under s 92(4)(b) of the Trade Marks Act for non-use.

155    In opening written submissions, the cross-claimants abandoned a further pleaded cross-claim that HCA had contravened s 18 of the ACL.

Cancellation of the Trade Mark under s 88(2)(c) – likely to deceive or cause confusion

156    The cross-claimants advance the likelihood of deception or confusion upon the basis of:

(a)    the Trade Mark representing that HCA is the only person who provides halal certification services by the use of the word “Authority”; and

(b)    the Trade Mark only being registered as a standard trade mark, but being used as a certification trade mark.

Use of the word “Authority”

157    In relation to the use of the word “Authority”, both the cross-claimants and HCA rely upon dictionary definitions as to its meaning to demonstrate the nature of its use. The cross-claimants rely upon the part of the Lexico.com dictionary definition that refers to a “person or organization having political or administrative power and control”; and the part of the Collins Online Dictionary definition that refers to “an official organization or government department that has the power to make decisions”. They submit that HCA does not have any such power or control, and is not an official organisation or government department with power to make decisions. They point to the evidence of Mr El-Mouelhy where he described himself as a “knowledge authority”, and submit that the Trade Mark is likely to confuse or deceive because it conveys a false impression. They submit that HCA is one of some 25 organisations recognised by the Commonwealth Department of Agriculture and Water Resources for the halal certification of meat. None of these, apart from HCA, describes themselves as an “Authority”. Accordingly, the cross-claimants submit that HCA is not the only organisation that provides such services and cannot be an authority for that purpose.

158    HCA asserts that the use of the word “Authority” in the Trade Mark, which encompasses its use on at least some of the accreditation certificates that it issued, does not suggest it has any official status. It submits that it rather expresses a status as to knowledge, having the quality that other people take notice of what is said on a topic. It submits that it falls within the broader dictionary definition of having “a quality which makes other people take notice of what they say” and also refers to “Someone who is an authority on a particular subject [being someone who] knows a lot about it”. HCA submits that the word “Authority” is being used only in a denotive way to say expressly who it is. That is, in context, it refers to no more than part of its corporate name and the expertise it asserts to hold by that name. It submits that it is not used in a connotative way to imply status, let alone any kind of official status. I am unable to accept that reasoning and find that the arguments advanced by the cross-claimants are more compelling, when coupled with the reasoning below.

159    The various iterations of the accreditation certificates reproduced earlier in these reasons bear the Trade Mark to give them an authoritative look. They do not refer to HCA by its full corporate name. The Trade Mark is used on the later-in-time certificates as an anti-forgery tool, similar to the way some Australian driver licenses bear a holographic state seal, or other holographic official marking, to prevent counterfeiting. The Trade Mark does not refer to “Halal Certification Authority Pty Ltd”, which would have served to limit to some extent the impact of the use of the word “Authority” by making it clear that this was only part of a private company name, although this is offset to some extent by the use of the company seal on a number of certificates in evidence. The accreditation certificates also refer to “this Authority”. None of this sits well with the suggestion that the word “Authority” in the Trade Mark alone was being used, or intended to be used, merely to denote the company name. Rather, the usage on the face of the accreditation certificate, and on the face of the Trade Mark considered on its own, accords with the usage of that Trade Mark in a connotative way to imply and convey not just some measure of expertise, but also authoritative status.

160    The usage of “Authority” as it appears on the Trade Mark indicates a body that has a particular status of an official or formal kind, necessarily involving, but going beyond, expertise. That is, akin to the dictionary definitions relied upon by the respondents, strongly suggesting an “organization having political or administrative power and control” approaching or amounting to “an official organization or government department that has power to make decisions”. It may readily be inferred that HCA overtly sought to convey by the usage of the Trade Mark on its certificates not just that it was a body that possessed authoritative knowledge, but rather than it was a body having some official role; that it had the status of being an official authority of some kind. It was successful in that endeavour.

161    Does the Trade Mark on its own achieve anything materially less deceptive or confusing than its use on the certificate? While the Trade Mark on its own probably does achieve less, even on its own, it is deceptive and likely to confuse by reason of, inter alia, the use of the word “Authority”. If examined closely, it similarly tends to convey the same impression on its own as is conveyed by its use on the accreditation certificate. Unlike the Packaging Logo, this is not saved by very small presentation as the evidence does not suggest that the Trade Mark is only used in such a small size. To the contrary, it was used on at least some certificates. HCA also stipulated a minimum size of 10mm on packaging, albeit that such additional packaging was not in evidence. I conclude that the Trade Mark was used in various sizes that included the size at which it is registered, as well as the size at which it is deployed on the certificates in evidence. I accept that it was not necessarily used in any larger size than 10mm on food packaging.

162    In the findings on use, I did not consider that the Packaging Logo was capable of conveying a descriptive quality such that it would convey that it was HCA specifically who provided halal certification services. This may seem inconsistent with the finding here that it is likely that the Trade Mark would be capable of creating a deceptive and confusing impression as to the word “Authority”, but the two findings can go together. The Trade Mark and Packaging Logo are such that they are likely to convey a more general impression: if a person actually reads the words “Halal Certification Authority Australia”, presented in the form of an official stamp or seal, they would most likely be left with the impression that there was some official, authoritative body that was saying that the goods were in fact halal, as opposed to the specific certification of a private company, Halal Certification Authority Pty Ltd. This is simply not true. That is therefore deceptive and likely to confuse in the manner in which it was deployed by HCA.

163    I consider that the cross-claimants have made good their application for rectification of the register by the removal of the Trade Mark upon the basis of the use of the word “Authority” that is liable to deceive or confuse, especially when used in a larger size, such as on certificates.

Use of the Trade Mark as a certification mark

164    The cross-claimants further case for rectification of the register is that the Trade Mark is used as a certification mark for which it is not registered, rather than as an ordinary trade mark, and that this too is deceptive and apt to confuse.

165    Plainly enough there can, at least conceptually, be an overlap in the two functions of a mark. It is only when a trade mark is used exclusively for certification purposes, and not as a standard trade mark, that it must be registered as such in order to obtain the protection of registration. There is otherwise no requirement for a certification trade mark to be registered as such.

166    The cross-claimants disavow a case that the Trade Mark was only used for certification purposes, at least in relation to an assertion of invalid registration for that reason. That is, their case is not advanced upon the basis of the requirement that a trade mark that functions only as a certification trade mark and can only be validly registered as such. That requirement exists because otherwise there would be no point in having the Part 16 regime at all: see Porace Ltd v Le Brasseur Surgical Manufacturing Co Ltd [1927] 1 Ch 589 at 591-2, addressing the similar relationship between s 3 and s 62 of the Trade Marks Act 1905 (UK). Thus for sole certification use, the requirements of Part 16 of the Trade Marks Act must be met for protection of registration to be available. Instead they advance a case for rectification by cancellation on the basis that the certification usage that did take place was likely to deceive or cause confusion.

167    The cross-claimants assert that the Trade Mark is likely to deceive or cause confusion because it is provided for use as a certification trade mark (as defined in ss 6 and 169 of the Trade Marks Act) when it is only registered as a standard trade mark. They rely upon the reasoning in the IP Australia determination Re Brillient Investment Publishing Pty Ltd [2019] ATMO 127; 151 IPR 68, as a convenient summary of the law in relation to certification trade marks. In particular, the hearing officer pointed out (footnote imbedded):

[13]    The function of a standard trade mark is to distinguish the trade origin of goods and services. The function of a certification trade mark is to indicate to consumers that the goods or services of interest have been certified by a particular person in relation to quality, accuracy or some other characteristic.

[14]    The 1929 United Kingdom case of Wilson’s and Mathieson’s Ltd’s Application v Meynell & Sons Ltd [(1929) 46 RPC 80 at 89] concerned, inter alia, the registration of a ‘standardization mark’ under s 62 of the Trade Marks Act 1905 (UK). Standardization trade marks are an early form of certification trade marks. In that case, Tomlin J stated:

It is not for me to express any view as to the wisdom or unwisdom of the registration of that class of mark as a trade mark under the Act, but it seems to be obvious that it would be desirable that a mark of that kind should, on the face of it, express what it is, namely a mark in the nature of a testing or certifying mark under Section 62, and that it should not blossom out into a design such as is commonly found in ordinary trade marks, and such as may, in certain circumstances, lead to confusion. So far as this mark is concerned, it is a mark which, beyond the initials BWA, of course contains no clue at all as to whether it is a testing or certifying mark.

168    The substance of the cross-claimants’ case on this point is that the Trade Mark is likely to cause confusion in the way obliquely identified by Tomlin J in the quote from Wilson’s and Mathieson’s Ltd v Meynell & Sons, Ltd; Re Wilson’s and Mathieson’s Ltd’s Application (1929) 46 RPC 80 at 89, reproduced above. In arguing that the Trade Mark was used as a certification trade mark and thereby likely to deceive or cause confusion because it was not registered as such, the cross-claimants rely upon:

(a)    the cross-examination evidence of Mr El-Mouelhy that there were rules relating to the use of the Trade Mark, as contained in an agreement, which accords with the HCA’s opening submissions to the effect that its rules and conditions always required not just the product to be certified, but also any information (I infer, halal information) associated with the goods at the time of sale, including on packaging, to be certified; and

(b)    the cross-examination evidence of Ms El-Mouelhy, who tried to avoid answering the question of whether the Trade Mark was used for certification, but in the course of doing so said that if use of the logo (that is, the Trade Mark) was requested, that was when HCA advised what was required to be done, being the “rule worldwide for certification”.

169    The requirements for a certification mark and a general or ordinary mark are certainly different in that some of the general requirements do not apply to registered certification marks. For example, there is no requirement to use a certification trade mark or else risk removal. It seems that this has a foundation in sound policy reasons, including goods or services not being of a standard to warrant certification, which may lead to non-use. There are also certain additional requirements for certification trade marks, including, in particular, certified approval by the Australian Competition and Consumer Commission of the application and of the rules proposed to govern the use of the trade mark.

170    I do not accept a submission to the effect that just because there is no requirement to register a certification trade mark, there can be no deception or confusion arising from a representation that a standard trade mark is a registered certification trade mark when it is not. However, I do accept that a representation as to registration as a certification trade mark when this has not in fact taken place may not always be easily or readily conveyed. I am not satisfied that the cross-claimants have succeeded in showing that this has occurred, and accordingly I am not satisfied that they have made good this aspect of their case. As observed elsewhere in these reasons, the only use of the Trade Mark sought to be established in this proceeding apart from the issuing of certificates with it affixed is the allegedly infringing use by the respondents. But there is no prohibition on partial use of a general trade mark for certification purposes.

171    I am not satisfied on the available evidence that use of the Trade Mark as a certification trade mark is liable to deceive or confuse by way of representing that it was registered as a certification trade mark when it was not.

Cancellation of the Trade Mark under s 88(2)(a) by reason of s 41(2) – not inherently capable of distinguishing services from the services of others

172    On the date of application for registration of the Trade Mark, 8 June 2004, s 41 was in the following terms:

41 Trade mark not distinguishing applicant’s goods or services

(1)    For the purposes of this section, the use of a trade mark by a predecessor in title of an applicant for the registration of the trade mark is taken to be a use of the trade mark by the applicant.

   Note 1:    For applicant and predecessor in title see section 6.

Note 2:    If a predecessor in title had authorised another person to use the trade mark, any authorised use of the trade mark by the other person is taken to be a use of the trade mark by the predecessor in title (see subsection 7(3) and section 8).

(2)    An application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered (designated goods or services) from the goods or services of other persons.

Note:    For goods of a person and services of a person see section 6.

(3)    In deciding the question whether or not a trade mark is capable of distinguishing the designated goods or services from the goods or services of other persons, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods or services from the goods or

(4)    Then, if the Registrar is still unable to decide the question, the following provisions apply.

(5)    If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services:

(a)    the Registrar is to consider whether, because of the combined effect of the following:

(i)    the extent to which the trade mark is inherently adapted to distinguish the designated goods or services;

   (ii)    the use, or intended use, of the trade mark by the applicant;

   (iii)    any other circumstances;

the trade mark does or will distinguish the designated goods or services as being those of the applicant; and

(b)    if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons; and

(c)    if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services—the trade mark is taken not to be capable of distinguishing the applicant’s goods or services from the goods or services of other persons.

   Note 1:    For goods of a person and services of a person see section 6.

Note 2:    Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

(6)    If the Registrar finds that the trade mark is not inherently adapted to distinguish the designated goods or services from the goods or services of other persons, the following provisions apply:

(a)    if the applicant establishes that, because of the extent to which the applicant has used the trade mark before the filing date in respect of the application, it does distinguish the designated goods or services as being those of the applicant—the trade mark is taken to be capable of distinguishing the designated goods or services from the goods or services of other persons;

(b)    in any other case—the trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons.

Note 1:    Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate:

(a)    the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; or

     (b)    the time of production of goods or of the rendering of services.

Note 2:    Use of a trade mark by a predecessor in title of an applicant and an authorised use of a trade mark by another person are each taken to be use of the trade mark by the applicant (see subsections (1) and 7(3) and section 8).

173    The cross-claimants rely upon s 41(2) as it then was, in the context of the mandatory considerations in the balance of the subsections, and assert in substance that the Trade Mark was not to any extent inherently adapted to distinguish HCA’s services from like services provided by anyone else. This consideration must be based on whether the Trade Mark could have been successfully challenged at the time of registration: see Unilever Australia Ltd v Karounos [2001] FCA 1132; 113 FCR 322 at [13]. However, there was no evidence, nor was it submitted, that the use or descriptive sense of the Trade Mark or Packaging Logo has substantially changed during the intervening time period, so I have turned to other current usages by way of illustration.

174    In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; 254 CLR 337 at [26] the High Court quoted with approval Kitto J’s explanation in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514 as to how the pivotal phrase “adapted to distinguish” was to be tested. His Honour said that it was to be considered (emphasis added by the High Court):

[B]y reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connection with similar goods in any manner which would infringe a registered trade mark granted in respect of it.

175    The plurality in Cantarella accepted that the passage emphasised above supported the proposition that the inherent adaptability of a trade mark consisting of a word, including a foreign word, is to be tested by checking the ordinary meaning (that is, ordinary signification) of the word to anyone in Australia purchasing, consuming or trading in the relevant goods. That is, the emphasised words were essential to the test: see Cantarella at [28]-[29] and [70]. In further reasoning to that conclusion, the plurality observed at [57], [59] and [71] (omitting footnotes):

[57]    In Clark Equipment, Kitto J considered for the purposes of registration in Pt B the word “Michigan”, which had acquired distinctiveness through twenty years of use in respect of the applicant’s goods despite the fact that it was a geographical name of a State in America. After approving Lord Parker’s test in Du Cros and Hamilton LJ’s observation in R J Lea, his Honour explained that directly descriptive words, like geographical names, are not prima facie suitable for the grant of a monopoly because use of them as trade marks will rarely eclipse their “primary” (that is, ordinary) signification. Such a word, his Honour said, “is plainly not inherently, ie in its own nature, adapted to distinguish the applicant’s goods”. Traders may legitimately want to use such words in connection with their goods because of the reference they are “inherently adapted to make” to those goods. Kitto J’s elaboration of the principle, derived from Lord Parker’s speech in Du Cros, applies with as much force to directly descriptive words as it does to words which are, according to their ordinary signification, geographical names.

…

[59]    The principles settled by this Court (and the United Kingdom authorities found in this Court to be persuasive) require that a foreign word be examined from the point of view of the possible impairment of the rights of honest traders and from the point of view of the public. It is the “ordinary signification” of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a “direct reference” to the relevant goods (prima facie not registrable) or makes a “covert and skilful allusion” to the relevant goods (prima facie registrable). When the “other traders” test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods. The test does not encompass the desire of other traders to use words which in relation to the goods are allusive or metaphorical. In relation to a word mark, English or foreign, “inherent adaption to distinguish” requires examination of the word itself, in the context of its proposed application to particular goods in Australia.

…

[71]    As shown by the authorities in this Court, the consideration of the “ordinary signification” of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has “direct” reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with. Once the “ordinary signification” of a word, English or foreign, is established an inquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. If a foreign word contains an allusive reference to the relevant goods it is prima facie qualified for the grant of a monopoly. However, if the foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it. Speaking generally, words which are prima facie entitled to a monopoly secured by registration are inherently adapted to distinguish.

The same reasoning must necessarily apply to services, and it did so in Canterella: see [76].

176    The principles applying to s 41, especially emerging from Clark Equipment and Cantarella, were summarised in a practical way in aid of application in Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56; 124 IPR 264 at [236] as follows:

[236]    On the question of whether a trade mark (relevantly here, a word or words) is capable of distinguishing an applicant’s services in respect of which the mark is registered from the goods or services of other persons, we apply the following principles:

(1) In deciding whether or not a trade mark is capable of distinguishing the designated services from the service of others, the first question is the extent to which the trade mark is inherently adapted to distinguish the designated services from those of others: s 41(2) and (3).

(2) In determining whether a trade mark is inherently adapted to distinguish the services of a trader, the answer largely depends upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their goods: Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511; [1965] ALR 344 (Clark Equipment) per Kitto J at CLR 514.

(3) The question of whether a trade mark is adapted to distinguish the services of the applicant is to be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives (in the exercise of the common right of the public to make honest use of words forming part of the common heritage for the sake of the signification which the words ordinarily possess) will think of the word and want to use it in connection with similar goods in any manner which would infringe the trade mark once registered: Clark Equipment at CLR 514.

(4) Directly descriptive words, like geographical names, are not prima facie suitable for the grant of a monopoly conferred by registration of a trade mark because use of them, as trade marks, will “rarely eclipse” their “primary” (that is, their ordinary) signification. Such words (or a word) are unlikely to be inherently, that is to say, “in [their] own nature”, adapted to distinguish the applicant’s goods. Traders may legitimately want to use such words in connection with their goods or services “because of the reference they are ‘inherently adapted to make’ to those goods”: Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337; 315 ALR 4; 109 IPR 154; [2014] HCA 48 (Cantarella) at [57] per French CJ, Hayne, Crennan and Kiefel JJ.

(5) The principles derived from the observations of Kitto J in Clark Equipment apply with as much force to directly descriptive words as they do to words which are, according to their ordinary signification, geographical names: Cantarella at [57].

(6) In determining whether a word is (or words are) inherently adapted to distinguish the goods or services of an applicant, the question is to be examined from the point of view of the “possible impairment” of the rights of “honest traders” and from the “point of view of the public”: Cantarella at [59].

(7) In determining whether a word contains (or words contain) a “direct reference” to the relevant goods or services (and thus prima facie not registrable as a trade mark) or whether the word (or words) makes a “covert and skilful allusion” to the relevant goods or services (and thus prima facie registrable as a trade mark), the “ordinary signification” of the word or words to persons who will purchase, consume or trade in the goods or services, must be considered: Cantarella at [59].

(8) Where the question is whether there are other traders who may legitimately want to use or apply a word or words in connection with their goods or services (other than a geographical name or a surname), the test refers to the “legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods”: Cantarella at [59].

(9) Consistent with the proposition at (7), the test described at (8) does not encompass the desire of other traders to use a word or words which in relation to the goods or services are “allusive or metaphorical”: Cantarella at [59].

(10) In determining whether a trade mark is inherently adapted to distinguish the designated goods or services for the purposes of s 41(3), the ordinary signification of the word or words are to be considered from the perspective of “any person in Australia concerned with the goods or services to which the trade mark is to be applied”: Cantarella at [70].

(11) Consideration of the “ordinary signification” of any word or words said to constitute a trade mark is “crucial”: Cantarella at [71]. That is so whether the word (or words) is said not to be registrable because: it is not an invented word and has direct reference to the character or quality of the goods or services; or, the word is laudatory; or, the word is a geographical name; or, the word has either lost its distinctiveness or it never had the requisite distinctiveness from the outset: Cantarella at [71].

(12) The process of reasoning in addressing s 41(3) of the Act involves first identifying the “ordinary signification” of the word in question and then undertaking an enquiry into whether other traders might legitimately need to use the word in respect of their goods: Cantarella at [71]. If a word contains an allusive reference to goods or services it is, prima facie, qualified for the grant of a monopoly as a trade mark under the Act. If, on the other hand, the word is understood, by the target audience, as having a directly descriptive meaning in relation to relevant goods or services then, prima facie, the proprietor is not entitled to a monopoly in respect of the word. As a general proposition, a word or words which are prima facie entitled to a monopoly secured by registration as a trade mark under the Act, according to this method, are inherently adapted to distinguish: Cantarella at [71].

177    This case is not concerned merely with a word trade mark, but with a logo constituting a device trade mark. A device trade mark is to be given to the trade mark “as a whole” as a combination of elements. HCA rely upon the determination by IP Australia of the opposition by My Brilliance Pty Ltd to Samsung Electronics Co. Ltd’s application for registration of a device trade mark comprising the words “Color Brilliance” with a multi-coloured depiction of a television or equivalent screen: [2016] ATMO 84. In rejecting a s 41 objection argument, the Registrar’s delegate at [28] cited:

(a)    Hudson’s Trade Mark (1886) 32 Ch D 311 (especially, I identify, at 321-2 per Cotton LJ, with whom Bowen and Fry LJJ agreed) in support of the proposition that, in applying the inherent adaption test identified in Clark Equipment, consideration is given to the trade mark as a whole (as it is the whole that is registered or sought to be registered, not only a part); and

(b)    Diamond T Motor Car Co’s Application [1921] 2 Ch 583 at 588-589 in support of the proposition that, when a trade mark consists of several elements, the enquiry is not whether each element is separately registrable.

Those propositions are not especially startling, but both cases state them with clarity.

178    The combined effect of those propositions was stated to be that the relevant inquiry is whether the trade mark as a whole, being the combination of elements in the manner in which they are arranged, is capable of distinguishing the relevant goods or services. That much may be readily accepted; but as will be seen from the reasoning below, that avails HCA little in the final analysis because the Trade Mark features in combination contribute little more than the words “Halal Certification Authority Australia” taken in isolation.

179    The difference turns on the impact of the words alone with a word trade mark, as against the impact of the appearance of a device, at least at the initial step of whether it is sufficiently inherently adapted to distinguish so as to preclude any need to give consideration to the application of s 41(5) or (6) if that threshold is not met or it is unclear whether it is met. In this case, if the Trade Mark is not, on its appearance alone, including the use of the words “Halal Certification Authority Australia”, sufficiently inherently adapted to distinguish, then it is poorly placed to distinguish to any measurable or useful extent by reference to aspects going beyond that.

180    The examiner’s conclusions in respect of the word trade mark sought and denied to HCA (set out at [25] above) are not determinative of the status of the device trade mark. However, they do reinforce what is otherwise readily clear from the evidence: that HCA is not in fact an authority in the sense of being a government or other official organisation of any kind. This aligns with HCA’s case, which is that it did not convey that impression, and that in this case, “Authority” meant not an official status, but a status that is acquired by knowledge and by having the quality that other people take notice of what one says on a topic (see [158] above). The respondents contend in their cross-claim that the refusal of the word trade mark went to demonstrating that the Trade Mark was not capable of distinguishing HCA’s services from those of anyone else providing a like service.

181    As a practical matter, the Trade Mark will either be sufficiently adapted to distinguish based on its appearance and taken as a whole and thereby conveyed meaning, or incapable of doing so by reference to anything else. There was no evidence before the Court which I consider elevates the Trade Mark, on its own, past the thresholds in s 41(2) and (3) by demonstrating that the use was such as to in fact distinguish HCA’s services from anyone else’s for the purposes of s 41(5)(a)(ii). This was particularly so, given:

(a)    the generic nature of that name and the lack of anything else about the device to make it capable of distinguishing HCA’s services;

(b)    that its use on certificates was in such a way that they did not add anything to the appearance of the Trade Mark alone; and

(c)    that there is, ironically enough, no evidence of the use of the Trade Mark on the packaging of anyone other than the respondents (there is evidence as to other clients of HCA who use the logo on packaging, but I found the affidavit evidence about this of little assistance without any images).

Nor does the past use or intended use, nor any other circumstances, when combined with appearance and conveyed meaning for the purposes of s 41(3), demonstrate that the Trade Mark will distinguish the services as being those of HCA as opposed to anyone else’s.

182    The substantive difference between the competing arguments boils down to whether the combined effect of the Trade Mark viewed as a whole, comprising the combined effect of the words “Halal Certification Authority Australia”, the annulus, and the Arabic lettering which conveys halal, meets the description of being adapted to distinguish the service provided by HCA from a like service provided by anyone else. This is also bearing in mind that, at the time of registration in 2004, there were approximately a dozen companies who provided this service.

183    The cross-claimants’ argument is that the words “Halal Certification Authority Australia” are entirely descriptive in merely stating the service provided, as was found by the examiner in rejecting an application for those words to be registered as a word trade mark. They submit that the overall impression of the Trade Mark is merely descriptive words being no more than a commonplace name that does not distinguish it from the other 25 entities that perform the same services; a non-distinctive annulus of a kind commonly in use; and generic Arabic script conveying halal which is itself freely available to anyone to use and is used on a number of the other registered trade marks as established by the evidence. As such, the cross-claimants contend that the Trade Mark was not capable of distinguishing HCA’s services from those of anyone else providing a like service, and should not remain on the register.

184    HCA submits that the three key words from its corporate name are a direct reference to it as an entity and as the provider of the service, and that there was no evidence, and the Court should not presume, that the Arabic lettering had any ordinary significance to anyone ordinarily purchasing, consuming or trading in the goods to which the service related. That submission has the practical effect of relying upon little, if anything, beyond the words “Halal Certification Authority Australia”, once it is appreciated that the combination of the Arabic lettering and the annulus in the configuration in which they appear in the Trade Mark is neither unique, nor capable in any practical sense being distinctive. HCA further submits that if someone else, actuated by proper motives, might legitimately want to use a single word or short phrase for the purpose of indicating the quality of their services, they could not legitimately wish to use all of the elements of the Trade Mark in that specific format and arrangement. That submission suffers from the same vice – the combination gains very little by the presence of the words “Halal Certification Authority Australia”. Those words are, for the reasons expressed by the trade mark examiner, not in themselves distinctive, although the relevant consideration is the Trade Mark as a whole, not its constituent parts separately.

185    The conclusion I have reached is that HCA has not met or answered the arguments advanced by the cross-claimants. The combination of the components of the Trade Mark, being the words “Halal Certification Authority Australia”, the annulus, and the Arabic lettering meaning halal, is not capable of distinguishing the service provided by HCA from a like service provided by anyone else. As to the words “Halal Certification Authority Australia”, while it is not determinative that a word trade mark over those words was rejected, there was no evidence, let alone overwhelming evidence, that the ordinary meaning of those words had been overshadowed in the marketplace by their significance as that aspect of the device Trade Mark. They remain words at best implying some significance, but without sufficient evidence, even by inference, to support that implication in any meaningful way. Further, there is no marked, if even measurable, improvement on that impression by combining the three components of the Trade Mark. By “its own nature”, the Trade Mark viewed as a whole does nothing to distinguish the services HCA provides from those capable of being provided by any other person providing a like service.

186    It is in every sense a mark that would convey to the eye of a purchaser in a descriptive or laudatory sense that goods were halal, and possibly that somebody was certifying them to be so: see Diamond T Motor Car at 590. Nothing about that combination is any more capable of distinguishing the service provided by HCA from a like service provided by anyone else than are the individual constituent parts. There was never a proper basis for giving such a logo a statutory monopoly by registration.

Discretion not to rectify the register

187    As already indicated, the Trade Mark is deceptive and likely to confuse by the use of the word “Authority”, and is not inherently adapted to distinguish HCA’s services from services provided by anyone else. However, there remains the residual discretion not to order rectification of the register despite these conclusions reached in favour of the cross-claimants.

188    The discretion is implicit in the nature of the power in s 88(1) (“may” exercise the power) and express in the expression of the power in s 101(3) (“may” decide not to remove a trade mark from the register if satisfied that is reasonable). The effect of Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6; 259 FCR 514 at [146] in relation to an application for rectification is that while the discretion is at large and only constrained by the general scope and objects of the Trade Marks Act, subject to s 89 addressed below, this is not so in cases in which a finding is made that a trade mark is liable to deceive or confuse. In such a case, sufficient reason must be established by the owner of the trade mark not to exercise the discretion. See also Austin Nichols & Co Inc v Lodestar Anstalt (No 1) [2012] FCAFC 8; 202 FCR 490 at [35]-[36] as to the breadth of the discretion. The Full Court in Anchorage found (at [158]) that:

[T]he correct approach is to ask, as McLelland J did in Charles of the Ritz [Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158], whether sufficient reason appears not to order the cancellation of a registered mark once the statutory discretion to make such an order has been enlivened. If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation of the registered mark to persuade the court that there is a sufficient reason not to order its cancellation.

189    That understanding informed the exercise of the discretion by Burley J in Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235; 354 ALR 353; 129 IPR 482, again a case in which s 89 did not arise. His Honour, having found the power enlivened, did not consider that the evidence disclosed sufficient reason not to cancel the trade marks, noting that there was a public interest in ensuring that the register be pure in only having and continuing the have valid marks registered.

190    I also place considerable weight upon the observations made in Health World Ltd v Shin-Sun Australia Pty Ltd [2010] HCA 13; 240 CLR 590 about the operation of the Trade Marks Act, at [22] (footnotes omitted):

Secondly, the legislative scheme reveals a concern with the condition of the Register of Trade Marks. It is a concern that it have “integrity” and that it be “pure”. It is a “public mischief” if the Register is not pure, for there is “public interest in [its] purity”. The concern and the public interest, viewed from the angle of consumers, is to ensure that the Register is maintained as an accurate record of marks which perform their statutory function – to indicate the trade origins of the goods to which it is intended that they be applied.

191    HCA relies upon a range of factual circumstances to resist the discretion being exercised on public interest grounds, and also relies upon s 89 of the Trade Marks Act, which gives a discretion not to rectify if the court is satisfied that the ground relied upon has not arisen through any act or fault of the registered owner of a trade mark.

192    In Campomar at [87], it was observed that in the exercise of the discretion it may be relevant to consider not only the public interest, but also the relative contributions made by the parties to the state of affairs, citing the decision of Brennan J in New South Wales Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1990) 171 CLR 363 at 391. That observation by Brennan J was directed to the circumstance, found to exist in that case, in which the use of a registered trade mark would deceive or cause confusion. To the extent that this is a relevant consideration in this case, it operates against HCA, because they chose to use only part of their corporate name in a way that increased the risk of deception or causing confusion. The finding already made is that the word “Authority”, in the context of the Trade Mark as a whole, has been deployed in a way that materially contributes to that state of affairs. In my view that is blameworthy conduct, and is a reason in favour of exercising the discretion, not a reason to refrain from doing so. It also removes from further consideration the positive discretion in s 89 not to rectify.

193    The factual matters upon which HCA relies may be briefly stated as follows.

194    As to public interest, reliance is placed upon the recognition of HCA by the Australian government and by governments and other entities overseas, said to be in connection with the trade mark. It is asserted that the Trade Mark is an important part of international mutual recognition, and that the form of identification required by slaughtermen to satisfy AUS-MEAT standards includes the Trade Mark. It is pointed out that red meat is economically important to Australia, and that HCA is required to maintain the integrity of the Trade Mark to meet international standards requirements.

195    More generally, HCA asserts that the Trade Mark performs an important role in indicating to the public a connection between it and particular goods and services, referring again to its recognition by government and other organisations both in Australia and overseas. This is said to be particularly significant by reason of the religious and technical requirements attached to the Trade Mark when approved for use. It is asserted that there is a public interest in facilitating consumers to identify halal products, and that if the Trade Mark is removed from the register, HCA will have no power to prevent it from being applied to products which have never been tested or certified, which may result in the public losing faith in halal certification marks or in the Trade Mark. I note that HCA, in other arguments advanced, relied upon the Trade Mark not being a certification trade mark and not having to be so in support of its validity.

196    As to other discretionary factors, HCA points to the length of time the Trade Mark has been on the register; the length of time for which it has been used; and, the business that has been developed (including direct and indirect employment in Australia and overseas). HCA relies upon the reputation and goodwill that has been engendered by its activities, with a considerable number of clients in Australia and overseas (some 872, with some 500 located in Australia) and some 200 applications for halal certification per annum. It points to the Trade Mark being displayed on audit reports and on staff T-shirts. It asserts that if the Trade Mark were to be removed from the register, its legitimate interests in relation to that mark would be harmed. It argues that, unlike the situation in Anchorage, this is not a dispute between competitors, but rather between the owner of the Trade Mark and others who have sought to exploit it.

197    I am of the view that none of these considerations necessarily depend upon continuation of registration of the Trade Mark. But to the extent that they do, they do not provide a sufficient public interest basis for refraining from ordering that the register be rectified by cancellation of the Trade Mark. These considerations are overblown by conflating HCA’s assessment and certification activities with the collateral and secondary use of the Trade Mark. There may be cost and inconvenience to HCA in, for example, seeking to register a proper trade mark to fulfil those objectives, but that is the product of its own conduct. Nor do any of the arguments advanced address any of the bases upon which rectification was sought. I am of the view that the seriousness of the successful grounds for rectification comfortably outweighs HCA’s arguments against it.

198    It follows that an order should be made for the rectification of the register by the cancellation of the registration of the Trade Mark.

Removal of the Trade Mark from the register under s 92(4)(b) for non-use

199    There is no need to spend any substantial amount of time on this issue, not least because the cross-claimants have already made good their case for rectification of the register. It is not in doubt that the Trade Mark was used as a water mark on the certificates that HCA issued, albeit that this was apparently not visible when printed out. Rather, it operated also to authenticate the certificates, which is a legitimate use of a trade mark, assuming that this constitutes use as a trade mark in the first place. While this is a limited use, it is sufficient to defy the description of only fleeting or pretended use. This aspect of the cross-claimant’s case must fail.

Conclusion

200    The originating application must be dismissed. The cross-claim must succeed in respect of the aspect of seeking rectification of the register, by way of cancellation of the registration of the Trade Mark. However, in the circumstances it is appropriate to stay the rectification order for 28 days, or if an appeal proceeding is brought within that time, until such a proceeding is heard and determined.

201    HCA must pay the respondents’ costs in respect of both the originating application and the cross-claim.

202    Each of the parties has leave to bring an application for a different costs order, or to vary the other orders made, within 14 days of delivery of this judgment, or such further time as may be allowed.

Associate:

Dated:    12 November 2021